A Corporation May Issue a Stock Dividend for Which of the Following

question 62

Multiple Choice

A corporation may issue a stock dividend for which of the following reasons?

• A) May want to increase permanent capital in the business
• B) May want to decrease market value
• C) May be short of cash and unable to pay a cash dividend
• D) All of the above are correct.

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Definitions:

State Agency

An organization run by the state government, performing specific functions or services.

Corporation

A legal entity that is separate and distinct from its owners, which can own property, be taxed, and be held legally liable.

Proposed Interstate Highway

A suggested or planned addition to the interstate highway system that may be under consideration or development but is not yet in existence.

Shareholders

Entities or individuals that own a part of a corporation through their stock holding, which entitles them to a share of the company’s profits and a say in its operations.