A 10% Stock Dividend Will Increase the Number of Shares

question 54

True/False

A 10% stock dividend will increase the number of shares outstanding, but the book value per share will decrease.

---

Definitions:

Wealth

The abundance of valuable financial assets or physical possessions which can be converted into a form that can be used for transactions.

Discounted Payback

The period of time it takes for the sum of the discounted cash flows to pay back the initial investment.

Payback

The amount of time it takes for an investment to generate enough returns to recover the original investment cost.

Average Accounting Return

A financial ratio that reflects the average net income of an investment compared to its average book value.