Which of the Following Stock Dividends Would Be Tax-Free to the Shareholder

question 55

Multiple Choice

Which of the following stock dividends would be tax-free to the shareholder?

• A) A 2-for-1 stock split to all holders of common stock.
• B) A stock dividend to all holders of preferred stock.
• C) A stock dividend where the shareholder could choose between cash and stock.
• D) A 2-for-1 stock split to all holders of common stock and a stock dividend to all holders of preferred stock are tax-free to the shareholder.

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