What Effect Will the Declaration and Distribution of a Stock

question 101

Multiple Choice

What effect will the declaration and distribution of a stock dividend have on net income and cash flows?

• A) no effect on net income or cash flows
• B) no effect on net income, decrease cash flows
• C) decrease net income, decrease cash flows
• D) increase net income, no effect on cash flows

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Definitions:

Financial Targets

Specific goals related to the financial performance or outcomes of a business, such as revenue, profit margins, or cost reductions.

Bonus

An additional compensation given to employees as a reward for achieving specific goals or exceptional performance.

Return on Investment

A measure used to evaluate the efficiency or profitability of an investment, calculated by dividing the benefit (return) of an investment by the cost of the investment.

Customer Satisfaction

The measure of how the goods or services provided by a company meet or surpass the customer expectation.