In a Stock Dividend, Each Shareholder Who Owns the Stock

question 106

Multiple Choice

In a stock dividend, each shareholder who owns the stock before the ex-dividend date receives ________ from the firm.

• A) additional shares
• B) additional shares and stock
• C) cash only
• D) shares for partial cash payment

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Definitions:

Discount Amount

The reduced amount from the original price of goods or services, often provided as an incentive or for early payment.

Discounted Note

A promissory note sold at a discount from its face value, where the difference between the purchase price and the value at maturity represents the interest income for the investor.

Maturity Value

The amount payable to the holder of a financial instrument at its maturity date, including the principal and any accrued interest.

Interest

The cost paid for borrowing money, typically expressed as a percentage of the total amount loaned.