A Stock Dividend Usually Causes a Transfer of Retained Earnings

question 14

True/False

A stock dividend usually causes a transfer of retained earnings to share capital, but not a decrease in the assets of the issuing corporation.

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Definitions:

Tax-Oriented Lease

A leasing arrangement designed to maximize tax benefits for the lessor, who retains ownership of the asset for tax purposes.

Leveraged Lease

A financing arrangement where a lessor uses borrowed funds to purchase an asset that is then leased to a third party.

Tax-Oriented

Refers to financial strategies or decisions that are primarily influenced by tax considerations.