Arnold,Inc

question 124

Multiple Choice

Arnold,Inc.declares and distributes a 10% common stock dividend when it has 10,000 shares of $10 par value common stock outstanding.If the market value of the common stock is $20,the journal entry to record the stock dividend would include a:

• A)debit to Retained Earnings $20,000.
• B)debit to Retained Earnings $1000.
• C)credit to Paid-in Capital in Excess of Par-Common $20,000.
• D)credit to Paid-in Capital in Excess of Par-Common $1000.

---

Definitions:

Expected NPV

The anticipated net present value of a project or investment, calculated using estimated inflows and outflows to assess its profitability and risk.

Cost Of Capital

The rate of return a company must offer investors to entice investment in the company, reflecting the risk of investing in the firm.

Capital Asset Pricing Model

A framework detailing how expected returns on assets, especially stocks, correlate with systematic risk.

Accounting Beta

A measure of the sensitivity of a firm's earnings before interest and taxes to changes in the market as a whole.