Stock Dividends and Stock Splits Should, at Least Conceptually, Have

question 18

True/False

Stock dividends and stock splits should, at least conceptually, have the same effect on shareholders' wealth.

---

Definitions:

Optimal Consumption

The mix of goods and services purchased that maximizes the utility or satisfaction of a consumer given their budget constraint.

Marginal Utility

The additional pleasure a consumer experiences from acquiring another unit of a product or service.

Marginal Utility Per Dollar

The additional utility gained from spending one more dollar on a good or service.

Diminishing Marginal Utility

The principle stating that as a person consumes more of a good or service, the satisfaction gained from each additional unit decreases.