Which Statement Is Correct

question 46

Multiple Choice

Which statement is correct?

• A)Total owner's equity decreases with a small stock dividend but not with a large stock dividend.
• B)A large stock dividend increases both the common stock and the capital in excess of par value account values.
• C)Stock dividends of 40 percent or less are called small stock dividends.
• D)Stock splits and stock dividends have been definitively proven to have no effect on a firm's market value.
• E)A small stock dividend increases both the par value per share and the value of the capital in excess of par value account.

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Definitions:

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The tendency of individuals to prefer outcomes with lower uncertainty over outcomes with higher uncertainty, even if the latter may offer a higher expected return.

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The price at which the supply and demand for insurance coverage balance, setting a market rate for premiums.

Equilibrium Quantity

The quantity of goods or services that is supplied and demanded at the point where the supply and demand curves intersect.