The Distribution of a Stock Dividend ________

question 62

Multiple Choice

The distribution of a stock dividend ________.

• A) decreases both assets and liabilities
• B) decreases assets and increase liabilities
• C) affects only stockholders' equity accounts
• D) increases both dividends payable and cash

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Definitions:

Output Effect

The change in total revenue resulting from selling additional units due to a price decrease, in the context of price elasticity of demand.

Income Effect

A change in the quantity demanded of a product that results from the change in real income (purchasing power) caused by a change in the product’s price.

Wage Rate

The amount of compensation offered to an employee per unit of time (e.g., hourly, daily) or piece of work done.

Purely Competitive

Purely competitive markets are characterized by many buyers and sellers, homogeneous products, and the absence of barriers to entry or exit, leading to firms being price takers.