Which of the Following Statements About Dividends Is Correct

question 237

Multiple Choice

Which of the following statements about dividends is correct?

• A)Companies sometimes issue stock dividends to lower the market price per share of stock.
• B)Stock dividends immediately increase the total value of the stockholders' investment.
• C)Cash dividends and stock dividends both decrease total stockholders' equity.
• D)A corporation has a legal obligation to pay dividends each year.

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Definitions:

Married Couple

Two individuals legally married to each other, who may file joint or separate tax returns in the eyes of the law.

Failure to File

Failure to File is the penalty incurred for not submitting a required tax return or document by the due date, which can result in fines and interest charges.

Tax Shown

The amount of tax displayed on a taxpayer's return or assessed as due by the IRS.

25%

A percentage often referred to in financial contexts, such as a tax bracket, rate of return on investment, or portion of an entity.