A Reduction of Par or Stated Value of Stock Results

question 109

Multiple Choice

A reduction of par or stated value of stock results from a

• A) liquidating dividend
• B) stock split
• C) stock option
• D) preferred dividend

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Definitions:

Expected Value

A calculation in probability theory that summarizes the expected return or outcome from a random event or situation.

Payoffs

The outcomes or returns received from an action or investment, often quantified in terms of profit or benefit.

Invest

The act of allocating resources, usually money, in the expectation of generating an income or profit.

Scrap Value

The estimated resale value of an asset at the end of its useful life, typically in a condition where it can only be sold for parts or raw materials.