Which of the Following Correctly Describes the Effect of Declaring

question 50

Multiple Choice

Which of the following correctly describes the effect of declaring and distributing a common stock dividend?

• A)Total stockholders' equity decreases.
• B)Total stockholders' equity remains the same.
• C)The number of shares outstanding increases while the par value of each share decreases.
• D)The number of shares outstanding decreases while the par value of each share increases.

---

Definitions:

Diagram

A visual representation that outlines, explains, or clarifies complex data or relationships using symbols, icons, lines, and texts.

Collusive Oligopoly

A market situation where a few companies control a large market share and agree, often illegally, to fix prices, limit production, or divide markets to maximize profits.

Price Increase

The rise in the cost of goods or services over time or due to market conditions.

Price Cut

A reduction in the selling price of goods or services.