All Other Things Equal,what Should Stock Dividends and Stock Splits

question 26

Multiple Choice

All other things equal,what should stock dividends and stock splits do?

• A)have, at least conceptually, the same effect on shareholders' wealth
• B)not have, at least conceptually, the same effect on shareholders' wealth
• C)have no relationship on shareholder's wealth
• D)the same effect on debtholders as they do on equity holders

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Definitions:

Incremental Cash Flows

The additional cash flow a company receives from taking on a new project or investment, after accounting for expenses.

Market Values

The market price at which a service or asset can currently be sold or bought.

Transaction Costs

Expenses incurred during the buying or selling of goods and services, which can include broker fees, commissions, and taxes.

Acquiring Firm

A company that takes over or buys another company, typically referred to in the context of mergers and acquisitions.