Problem D-III — Stock Dividends and Stock Splits

question 67

Multiple Choice

Problem D-III — Stock Dividends and Stock Splits
Stock dividends and stock splits are common forms of corporate stock distribution to stockholders.

Consider each of the numbered statements. You are to decide whether it:
-The retained earnings available for dividends are increased.

• A)Applies to both stock dividends and stock splits.
• B)Applies to neither.
• C)Applies to stock splits only.
• D)Applies to stock dividends only.
• E)Applies to stock splits effected in the form of a dividend only.
• F)Applies to both stock splits effected in the form of a dividend and a stock dividend.
• (In each instance, the issuing company has only one class of stock.)
• Instructions
• Print next to the number of each statement below, the single capital letter of the description which applies to the statement.

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Definitions:

Rapid Explosion

A sudden and rapid increase or expansion in a particular area or field, often used to describe quick growth in technology, population, or information.

Entrepreneurship

Entrepreneurship is the act of creating, managing, and running a new business or venture, taking on financial risks in the hope of making a profit.

Small Firms

Businesses characterized by a small number of employees, low revenue, or limited market share.

Driving Innovation

The act of pushing forward new ideas, technologies, or methods to create value.