Which of the Following Statements About Large Stock Dividends Is

question 36

Multiple Choice

Which of the following statements about large stock dividends is true?

• A)If the market price of the stock before a 50% stock dividend is $30,the market price after the stock dividend will be $45.
• B)If the market price of the stock before a 50% stock dividend is $30,the market price after the stock dividend will be $60.
• C)A stockholder who owned 50 shares of stock before the 50% stock dividend,will own 100 shares of stock after the stock dividend.
• D)With a 50% stock dividend,Retained Earnings is reduced by the par value of new shares of stock issued.
• E)With a 50% stock dividend,Retained Earnings is reduced by the market value of new shares of stock issued.

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Definitions:

Journal Entry

A record of a financial transaction in the accounting books of a business, showing the accounts affected and the amounts.

Invoice

A document issued by a seller to a buyer that lists goods or services provided, prices, and payment terms.

Ledger

A comprehensive collection of a company's financial transactions, organized by account.

Net Income

The total earnings a company makes after all expenses and taxes have been deducted from revenue.