Which of the Following Is Not a Side Effect of a Stock

question 25

Multiple Choice

Which of the following is not a side effect of a stock dividend?

• A) In terms of accounting, it is treated like a regular cash dividend.
• B) Investors may ascribe an informational content to a stock dividend.
• C) Investors pay the same amount of tax on stock dividends.
• D) The stock price will increase.

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Definitions:

Life Insurance Policy

A contract between an individual and an insurance company, where the insurer pays a designated beneficiary a sum of money upon the death of the insured person.

Beneficiary

A person or entity entitled to receive benefits from a will, trust, insurance policy, or other legal agreements.

Divorced

The legal dissolution of a marriage by a court or other competent body.

Proceeds

The total amount of money received from a sale or transaction.