F Co Declares a 5% Stock Dividend

question 138

Multiple Choice

F Co. declares a 5% stock dividend. If the market price at declaration is $12 per share, a shareholder with 110 shares likely would receive:

• A) Five additional shares.
• B) Fractional share rights for 5½ shares.
• C) Five additional shares and $6 in cash.
• D) Five additional shares and a fractional share right for 2½ shares.

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Definitions:

GDP Calculation

The process of estimating the gross domestic product, measuring the economic activity within a country by adding up the value of all goods and services produced.

Consumption

Household purchases of final goods and services, except for new residences, which count as investment.

Government Purchases

Spending for goods and services by all levels of government; government outlays minus transfer payments.

Net Exports

The value of a country’s exports minus the value of its imports.