A Small Stock Dividend Will

question 34

Multiple Choice

A small stock dividend will:

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

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Definitions:

Issue Price

The price at which new shares, bonds, or other securities are offered to the public or the holders.

Cash Dividend

A payment of profits by a company to its shareholders in the form of cash, typically issued on a quarterly basis.

Liability

A financial obligation or debt owed by a business to another entity.

Participating Preferred Stock

A type of preferred stock that provides holders the right to dividend payments exceeding the basic fixed rate if the company meets specified financial performance criteria.