A Corporation with $10 Par Common Stock Issues a Small

question 67

Multiple Choice

A corporation with $10 par common stock issues a small stock dividend. The capitalization of retained earnings is equal to:

• A) The par value of the shares outstanding.
• B) The par value of the shares to be distributed.
• C) There is no capitalization of retained earnings in the case of a small stock dividend.
• D) The market value of the shares outstanding.
• E) The market value of the shares to be distributed.