Which of the Following Statements Accurately Explains Why the Board

question 83

Multiple Choice

Which of the following statements accurately explains why the board of directors of a company whose financial future contains some uncertainties might issue a 2-for-1 stock split rather than declare a 100% stock dividend?

• A)A stock split would not reduce the market price per share,whereas a stock dividend would.
• B)A stock split would reduce the market price per share,whereas a stock dividend would not.
• C)A stock split would increase total stockholders' equity,whereas a stock dividend would not.
• D)A stock split would not reduce Retained Earnings,whereas a stock dividend would.

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Definitions:

Guilty Knowledge Test

A psychological assessment used in criminal investigations that measures physiological responses to determine whether the subject knows details about a crime.

Spillover Effect

Occurs when the feelings, thoughts, or behaviors in one domain of an individual's life influence the same aspects in another domain.

Cannon-Bard Theory

A theory of emotion that argues that physiological arousal and emotional experience occur simultaneously, not sequentially, following an emotional stimulus.

James-Lange Theory

A theory suggesting that physiological arousal precedes the experience of emotions; individuals interpret specific physiological responses as different emotions.