A Stock Dividend Is Issued for the Following Reasons Except

question 38

Multiple Choice

A stock dividend is issued for the following reasons except:

• A) to continue dividends but conserve cash
• B) to reduce the per-share market price of the shares
• C) to reduce total shareholders' equity
• D) to increase the shares account and decrease Retained Earnings

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Definitions:

Dividend Yield

A financial ratio that indicates how much a company pays out in dividends each year relative to its stock price.

Price-Earnings Ratio

A valuation metric that compares a company's current share price to its per-share earnings.

Return On Total Assets

A financial ratio that indicates how effectively a company is using its assets to generate profit, measured by dividing net income by total assets.

Earnings Per Share

This is a financial ratio that measures the amount of net income earned per share of stock owned.