Both a Stock Split and a Stock Dividend Will Result

question 72

Multiple Choice

Both a stock split and a stock dividend will result in an increase in:

• A) the number of shares outstanding.
• B) the market value of the firm.
• C) the total assets of the firm.
• D)both the number of shares outstanding and the total assets of the firm.

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Definitions:

Monopolistic Competition

A commercial scenario where a plethora of firms deal in products that are very much alike but not perfectly the same, giving them some extent of influence in the market.

Perfect Competition

A market structure characterized by a large number of small firms, a homogeneous product, free entry and exit, and perfect knowledge, leading to firms being price takers.

Profit-maximizing Price

The selling price per unit that maximizes a firm’s profits, based on its cost structure and market demand.

Demand

The quantity of a product or service that consumers are willing and able to purchase at various prices during a certain period.