Which of the Following Statements Accurately Explains Why the Board

question 11

Multiple Choice

Which of the following statements accurately explains why the board of directors of a company that is facing financial difficulties might issue a 2-for-1 stock split rather than declare a 100% stock dividend?

• A)A stock split would not reduce the market price per share,whereas a stock dividend would.
• B)A stock split would reduce the market price per share,whereas a stock dividend would not.
• C)A stock split would increase total shareholders' equity,whereas a stock dividend would not.
• D)A stock split would not reduce retained earnings,whereas a stock dividend would.

Analyze the impact of manufacturing cost reductions on product pricing and profitability.

Assess the role of competition-based pricing in setting product prices.

Understand the concept of contribution margin and contribution per machine hour.

Comprehend the principle of target costing.

---

Definitions:

Government Disability Payments

are financial benefits provided by the government to individuals who cannot work because of a disabling condition.

Supervised Settings

Environments where activities are monitored and controlled by qualified personnel, often ensuring safety and adherence to specific rules or standards.

Family Support

The assistance, comfort, and emotional sustenance provided by family members to each other, often crucial in times of illness or stress.

Tardive Dyskinesia

A neurological disorder characterized by involuntary, repetitive body movements, often resulting from long-term use of certain psychiatric medications.