A Small Stock Dividend Will

question 65

Multiple Choice

A small stock dividend will:

• A) reduce total assets.
• B) reduce total owners' equity.
• C) increase total owners' equity.
• D) have no effect on total assets or total owners' equity.

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Definitions:

External Cost

A cost that a transaction or activity imposes on a party who is not involved in the transaction, often not reflected in market prices.

Negative Externality

A cost that affects a party who did not choose to incur that cost, often associated with environmental, health, and safety concerns of public and private actions.

Positive Externality

A benefit that is enjoyed by a third-party as a result of an economic transaction.

Negative Externalities

Unintended adverse effects of an economic activity on unrelated third parties; they represent a failure of the market to fully account for the impacts of transactions.