All of the Following Are Reasons for Issuing Small Stock

question 68

Multiple Choice

All of the following are reasons for issuing small stock dividends except:

• A)it does not reduce the assets of the company.
• B)it provides an opportunity for the company to capitalize its retained earnings.
• C)it allows the company to issue a dividend without recording it in their records.
• D)it allows the shareholders the option of keeping the shares or selling them for cash.

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Definitions:

Target's Shares

Equity stakes in the Target Corporation, a publicly traded company known for its retail operations.

Price

Exchange value of a good or service.

Leverage

The use of borrowed funds or other financial instruments to increase the potential return of an investment.

Potential Return

The expected gain or loss from an investment, taking into consideration both the risk and the expected rate of return.