Assuming No Market Imperfections,which of the Following Processes Would Not

question 117

Multiple Choice

Assuming no market imperfections,which of the following processes would not be expected to have an effect on share price?

• A) Dividend declaration and payment
• B) Stock repurchase
• C) Stock dividend
• D) Stock split

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Definitions:

Acquisition Differential

Represents the excess amount over the fair market value of net assets that is paid by a company to acquire another company.

Capital Assets

Long-term assets acquired for operation and not intended for sale, including property, plant, and equipment.

Goodwill Impairment

An accounting charge that occurs when the market value of goodwill is less than its recorded value on the balance sheet.

Plant and Equipment

Long-term tangible assets used in the operations of a business to produce goods and services, such as machinery, buildings, and vehicles.