When a Stock Dividend Is Declared, Total Stockholders' Equity Will

question 16

Multiple Choice

When a stock dividend is declared, total stockholders' equity will:

• A) Decrease.
• B) Increase.
• C) Not change.
• D) Increase or decrease, depending upon certain variables.

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Definitions:

Profit Margin

A measure of profitability calculated as net income divided by revenue, or net profits divided by sales.

Interval Measure

Interval measure is a financial metric that assesses a company's ability to meet its current operational expenses by comparing its current assets to its current cash outflows.

Net Fixed Assets

These are a company's total fixed assets minus its accumulated depreciation, representing the actual value of the company’s fixed assets.

Average Daily Operating Costs

The average amount spent by a business on its day-to-day operational activities, divided by the number of days in the period.