Lawrenceville Co.reported the Following: ​

question 36

Multiple Choice

Lawrenceville Co.reported the following: ​
Common stock, $3 par, 10,000 shares authorized, 5,000 shares issued and outstanding
​
What is the effect of a 10% stock dividend if the market price of the common stock is $30 per share when the dividend is declared?

• A) Cash decreases $30,000.
• B) Retained earnings in the amount of $15,000 is transferred to the contributed capital accounts.
• C) Additional Paid-in Capital decreases $30,000.
• D) A stock dividend has no effect on any stockholders' equity accounts.

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Definitions:

Market Rate

The prevailing interest rate available in the marketplace on investments or loans.

Coupon Interest Rate

The annual interest rate paid on a bond’s face value by the issuing entity, also known as the nominal rate.

Bond Issued At Premium

Occurs when a bond's selling price is higher than its face value, indicating investor confidence or lower-than-average interest rates.

Market Rate

The typical interest rate or cost of borrowing money in the general market, often referred to in terms of loans and savings.