What Effect Does a Stock Dividend Have on the Book

question 101

Multiple Choice

What effect does a stock dividend have on the book and market values of the firm?

• A) Book value increases; market value increases
• B) Book value increases; market value decreases
• C) Book value decreases; market value increases
• D) Book and market values remain constant

---

Definitions:

Dissociative Identity Disorder

A psychological disorder characterized by the presence of two or more distinct personality states or identities within a single individual.

Dissociative Amnesia

A disorder characterized by an inability to recall important personal information, usually following a traumatic or stressful event.

DSM-III

The third edition of the Diagnostic and Statistical Manual of Mental Disorders, a publication by the American Psychiatric Association that classifies mental disorders using specific criteria.

Dimensional

An approach to diagnosis that examines constructs on a continuum rather than as discrete categorical entities.