Which of the Following Occurs When a Corporation Distributes a Stock

question 146

Multiple Choice

Which of the following occurs when a corporation distributes a stock dividend?

• A)Total liabilities increase.
• B)Total stockholders' equity increases.
• C)Total assets decrease.
• D)Total stockholders' equity remains unchanged.

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Definitions:

Authorized

Given official permission for something to happen or approved as meeting certain standards.

Promoter

An individual or company that helps raise capital, organize, and start a business or event.

Liability

A legal responsibility or obligation, particularly in terms of debts or financial compensation for loss or damage caused by one's actions or inactions.

Preincorporation Contracts

Agreements entered into on behalf of a corporation before it is legally formed, for which the corporation may later assume liability.