Declaring and Distributing Stock Dividends

question 18

Multiple Choice

Declaring and distributing stock dividends:

• A)increases the total liabilities of the corporation and decreases the total stockholders' equity.
• B)is the distribution of cash to the stockholders.
• C)has no effect on total stockholders' equity.
• D)reduces the total assets of the corporation.

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Definitions:

Legal Case

A dispute between opposing parties resolved in a court of law.

Pay Dividends

The act of distributing a portion of a company's profits to its shareholders at intervals, typically quarterly or annually.

Stockholders

Individuals or entities that own shares in a corporation, giving them certain rights such as voting on corporate matters.

Transaction Costs

Expenses incurred when buying or selling goods and services, such as fees and commissions.