Which of the Following Is (Are) Not True About a Stock

question 42

Multiple Choice

Which of the following is (are) not true about a stock dividend?

• A) Total stockholders' equity does not change when a stock dividend is declared or when it is distributed.
• B) Between the time a stock dividend is declared and when it is distributed, the company's commitment is presented in the balance sheet as a current liability.
• C) Stock dividends do not change the relative portion of the company owned by individual stockholders.
• D) Stock dividends have no impact on the amount of the company's assets.

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Definitions:

Investment

Allocating resources, usually money, with the expectation of earning an income or profit.

Term Deposits

Fixed-term savings accounts that typically offer higher interest rates, where money is locked in for a certain period.

Surplus Funds

Excess money or assets that remain after all expenses have been paid.

Maturing

The process by which a financial instrument reaches its due date and the principal is required to be repaid.