What Effect Does a Stock Dividend Have on the Book

question 69

Multiple Choice

What effect does a stock dividend have on the book and market values of the firm?

• A) Both the book and market values increase
• B) Book value increases; market value decreases
• C) Book value decreases; market value increases
• D) Both the book and market values remain constant

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Definitions:

P-value

The probability of obtaining test results at least as extreme as the ones observed during the test, assuming the null hypothesis is true.

Test Statistic

This is a value, derived from sample data, used in hypothesis testing to determine whether to reject the null hypothesis.

Null Hypothesis

The theory suggesting that any noted discrepancies between certain groups are merely the result of sampling or experimental inaccuracies, asserting no substantial variance exists.

Sample Size

Refers to the number of observations or data points collected from a population for the purpose of statistical analysis, influencing the accuracy of the results.