Stock Splits and Stock Dividends Are Basically the Same from the Viewpoint

question 140

True/False

Stock splits and stock dividends are basically the same from the viewpoint of the shareholders but not from the viewpoint of the corporation.

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Definitions:

Net Income

The total profit of a company after all expenses, including taxes and operating costs, have been deducted from total revenue.

Depreciation

A method of allocating the cost of a tangible asset over its useful life, reflecting its consumption, wear and tear, or obsolescence.

Market Value

The existing cost for acquiring or selling an asset or service in the unrestricted market.

Indefinite-Lived Intangible

An intangible asset that has no foreseeable limit on the period over which it is expected to contribute to the cash flow of a business.