A Corporation May Issue a Stock Dividend for Which of the Following

question 75

Multiple Choice

A corporation may issue a stock dividend for which of the following reasons?

• A) It may be short of cash and unable to pay a cash dividend.
• B) It may want to increase the marketability of its stock by raising the price per share.
• C) It may have a large debit balance in Retained Earnings and the directors may want to transfer part of this balance to the common stock account.
• D) It may want to increase the stockholders' ownership in the corporation.

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Definitions:

Mild Steel

A low carbon steel containing a small percentage of carbon, widely used in construction due to its malleability and relatively low cost.

C-Channel Frame Rail

A structural component in vehicles or machinery, shaped like the letter 'C', providing support and rigidity.

Flange

A flat rim, collar, or rib, typically projecting for strength or attachment to another object, as at the end of a pipe, steam cylinder, etc.

Gusset

A triangular piece of metal used to reinforce or strengthen a joint in structures or in components like bicycle frames.