Which of the Following Describes the Effect of a Stock

question 13

Multiple Choice

Which of the following describes the effect of a stock dividend?

• A) A stock dividend immediately increases the market price of a share of stock.
• B) A stock dividend immediately decreases the paid-in capital account.
• C) A stock dividend immediately increases the number of shares outstanding.
• D) A stock dividend indicates that the company must be short on cash.

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Definitions:

Confession

The act of admitting to something, particularly acknowledging one's sins or wrongdoings, often within a religious or legal context.

Duress

A compulsion by threat or force; a condition in which a person acts as a result of pressure or coercion.

Jury

A jury is a group of people sworn to render a verdict in a legal case on the basis of evidence presented to them in a court.

Covariation Principle

A theory suggesting that people attribute behavior to causes that appear at the same time as the behavior and are absent when the behavior does not occur.