Which Statement Relating to Share Dividends (Bonus Share Issues) Is

question 42

Multiple Choice

Which statement relating to share dividends (bonus share issues) is incorrect?

• A) They reduce total shareholder's equity.
• B) They involve a transfer of retained earnings or reserves to share capital.
• C) Shareholders are provided with additional shares without cost.
• D) A bonus issue can only be made if the company has sufficient reserves.

---

Definitions:

McClelland's Theory

A motivational theory that categorizes needs into three primary types: the need for achievement, the need for affiliation, and the need for power, influencing individuals' motivations and behavior.

Need of Achievement

A personal motivation drive to accomplish tasks, meet high standards, and work towards the success of goals.

Maslow

Refers to Abraham Maslow, a psychologist known for creating Maslow's hierarchy of needs, a theory in psychology about human motivation.

Alderfer

Refers to Clayton Alderfer's ERG theory, which categorizes human needs into three groups: existence, relatedness, and growth.