The Per Share Amount Normally Assigned by the Board of Directors

question 88

Multiple Choice

The per share amount normally assigned by the board of directors to a small stock dividend is

• A) the market value of the stock on the date of declaration.
• B) the average price paid by stockholders on outstanding shares.
• C) the par or stated value of the stock.
• D) zero.

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Definitions:

Expected Inflation

The rate at which the general level of prices for goods and services is anticipated to rise.

Absolute Purchasing Power Parity

A theory that suggests that in the absence of transportation and other transaction costs, identical goods in different countries should have the same price when expressed in a common currency.

Exchange Rate

The price of a single currency in terms of another currency.

Relative Purchasing Power Parity

A theory that suggests that changes in the exchange rates between currencies are in proportion to changes in the countries’ price levels.