A Stock Dividend

question 79

Multiple Choice

A stock dividend

• A)results in a transfer of retained earnings to contributed capital.
• B)increases the number of shares outstanding and involves a pro rata reduction in the par value per share.
• C)is accounted for in exactly the same manner as a stock split.
• D)results in a transfer of retained earnings to contributed capital and also increases the number of shares outstanding and involves a pro rata reduction in the par value per share.

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Definitions:

Market Equilibrium

A state in which market supply and demand balance each other, resulting in stable prices and quantities.

Producer Surplus

The difference between what producers are willing to accept for a good or service versus what they actually receive, often illustrated in economic surplus models.

Equilibrium

A state of balance in a market or economy where supply equals demand, resulting in stable prices.

Producer Surplus

The difference between what producers are willing to accept for a good versus what they actually receive.