A Stock Dividend

question 16

Multiple Choice

A stock dividend:

• A) If less than 20% to 25%, reduces retained earnings by the par value of shares distributed in the dividend
• B) Increases the wealth of the recipient if the market value of the shares are unchanged by the stock dividend
• C) Alters the par value of the common shares
• D) If 100%, has no effect on the market value of the shares

---

Definitions:

Well-structured Problems

Pertains to problems that have clearly defined parameters and solutions, often with known methods for solving them.

Routine Decision

Choices or judgments made during regular, day-to-day activities that are often repetitive and require minimal thought.

Ill-structured Problem

A problem that lacks a clear path to a solution, often requiring creative or critical thinking for resolution.

Existing State

The current condition or situation of a system, organization, or individual before any changes or interventions are made.