On 28 February 2020, Xavier Ltd Declared and Distributed an 8

question 33

Multiple Choice

On 28 February 2020, Xavier Ltd declared and distributed an 8% share dividend (bonus issue) . At that date the entity's total share capital was $180 000, fully paid to $1. What is the effect of this dividend on Xavier Ltd's total shareholders' equity?

• A) No effect.
• B) Decrease of $14 400.
• C) Increase of $14 400.
• D) It depends on the current market value of the shares.

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