Assume a Firm Has Declared a 10% Stock Dividend on Its

question 13

Multiple Choice

Assume a firm has declared a 10% stock dividend on its 1.5 million shares of outstanding $3 par value common stock. If the market value of the stock at the date of the stock dividend is $10 per share and the retained earnings account balance just before the dividend was $2,600,000, what is the retained earnings balance after the dividend?

• A)$2,450,000
• B)$1,100,000
• C)$1,500,000
• D)$2,150,000

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Definitions:

Labor Law

The collection of laws, regulations, and prior judicial decisions that delineate the legal entitlements and limitations for employees and their unions.

Industrial Democracy

A system of governance in an organization where all stakeholders, including employees, have a say in decision-making processes.

Democratic Principles

The fundamental guidelines that promote equality, freedom, and justice within societies, often associated with the practice of voting and majority rule.

Labor Union

An organization formed by workers to protect and advance their rights and interests through collective bargaining.