When a Share Dividend Is Less Than 20-25 Percent of the Ordinary

question 82

True/False

When a share dividend is less than 20-25 percent of the ordinary shares outstanding, a company is required to transfer the fair value of the shares issued from retained earnings.

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Definitions:

Marginal Revenue

The increment in revenue resulting from the sale of an additional unit of output in a market.

Marginal Cost

The budget allocation for the production of an additional unit of a product or service.

Perfect Competition

A market structure characterized by many buyers and sellers, free entry and exit, and a homogeneous product, leading to no single entity having market power.

Marginal Unit

Refers to the additional or incremental unit of a good or service considered in analysis or decision-making.