A Firm Paying a Stock Dividend Will Experience a Drop

question 62

True/False

A firm paying a stock dividend will experience a drop in its earnings per share but its shareholders' total claim on earnings will increase.

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Definitions:

Increases Assets

Transactions or events that enhance the economic resources controlled by a business.

Purchase Requisition

An internal document used within an organization to request authorization for a purchase before a purchase order is issued.

Purchase Order

An official document issued by a buyer committing to pay the seller for the sale of specific products or services to be delivered in the future.