A 10% Stock Dividend Is the Equivalent of a $1,000

question 22

True/False

A 10% stock dividend is the equivalent of a $1,000 par value bond paying annual interest of 10%.

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Definitions:

Net Investment

The total amount spent by a company on capital assets, such as plants and machinery, minus depreciation.

Nonsystematic Standard Deviation

A measure of the dispersion of returns on an investment due to factors specific to an individual asset or company, not the market.

Equally-Weighted Portfolio

An investment portfolio in which each asset is invested in with an equal amount of capital, providing diversification and reducing risk.

Securities

Financial instruments that represent an ownership position in a publicly-traded corporation (stock), a creditor relationship with a governmental body or a corporation (bond), or rights to ownership as represented by an option.