Which of the Following Statements Is False

question 62

Multiple Choice

Which of the following statements is false?

• A) With a stock dividend, a firm does not pay out any cash to shareholders. As a result, the total market value of the firm's assets and liabilities, and therefore of its equity, is unchanged.
• B) If the price of the stock falls too low, a company can engage in a reverse split and reduce the number of shares outstanding.
• C) Stock dividends of 50% or higher are generally referred to as stock splits.
• D) Rather than pay a dividend using cash or shares of its own stock, a firm can also distribute shares of a subsidiary in a transaction referred to as a off-shoot.

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Definitions:

Delivery Person

An individual responsible for transporting and delivering goods to customers or businesses.

Durable Power of Attorney

A legal document that grants a trusted person the authority to act on another's behalf, especially in financial or healthcare decisions, and remains effective if the grantor becomes incapacitated.

Subsequent Incapacity

The condition of becoming unable to perform or fulfill certain duties or responsibilities after entering into a legal agreement or contract.

Accounting

The process of recording, classifying, and summarizing financial transactions to provide an accurate picture of a business's financial health.