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:

Effectiveness

The degree to which objectives are achieved and the extent to which targeted problems are solved in a timely and efficient manner.

Components

The individual parts or elements that make up a larger system or complex structure.

Ethics Competency

The ability to recognize, analyze, and act upon ethical issues and conflicts in a manner that aligns with moral and societal expectations.

Values and Principles

Core beliefs and guidelines that inform decision-making and behavior within an organization or individual's life.