The Stock Dividend Relabels a Portion of the Retained Earnings

question 185

Multiple Choice

The stock dividend relabels a portion of the retained earnings that had been legally available for dividend declarations as a more permanent form of shareholders' equity, because

• A)the firm has used some funds represented by past earnings to expand plant facilities or to replace assets at increased prices or to retire bonds.
• B)the firm does not have this cash available for cash dividends
• C)the stock dividend does not affect the availability of cash on hand or cash that the firm has already invested; rather, the stock dividend signals to readers of the balance sheet, perhaps more clearly than before, the commitment to investment.
• D)all of the above
• E)none of the above

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Definitions:

PQRST

A mnemonic used in medical practice to assess pain; it stands for Provocation/Palliation, Quality/Quantity, Region/Radiation, Severity Scale, and Timing.

Chest Pain

Aching or discomfort in the chest area, which can be a symptom of various conditions, including heart attack or indigestion.

Severity

The intensity or seriousness of a condition, symptom, or disease, often influencing the approach to treatment or management.

PQRST

A mnemonic used in medical assessment to evaluate pain; it stands for Provokes, Quality, Radiates, Severity, and Time.