A Stock Dividend Differs from a Stock Split,in That

question 42

Multiple Choice

A stock dividend differs from a stock split,in that:

• A) The amount of a stock dividend is fully taxable, whereas there is no tax implication with a stock split.
• B) Stock dividends increase the number shares greater than 25 percent, whereas stock splits increase shares by less than 25 percent
• C) Stock splits always increase the average share price whereas for stock dividends the price would remain the same
• D) Stock splits have an impact on retained earnings, whereas stock dividends have no impact

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Definitions:

Equilibrium

A state in a market or economy where supply equals demand, and there is no incentive for change under current conditions.

Coconuts

Often used in economic models and examples, referring to a simplistic commodity to illustrate principles of trade, investment, or resource allocation.

Equilibrium

A condition or state in which economic forces such as supply and demand are balanced, resulting in a stable market.

Coconuts

A large tropical fruit with a hard shell, edible white flesh, and clear liquid, often used in food and drink preparations.