Which of the Following Describes the Effect of a Stock

question 13

Multiple Choice

Which of the following describes the effect of a stock dividend?

• A) A stock dividend immediately increases the market price of a share of stock.
• B) A stock dividend immediately decreases the paid-in capital account.
• C) A stock dividend immediately increases the number of shares outstanding.
• D) A stock dividend indicates that the company must be short on cash.

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Definitions:

Shared Rules

Commonly agreed upon guidelines or norms that govern behavior within a group or society.

Norms

Shared expectations or rules within a society or group about how members should act in specific situations.

Milgram

Refers to Stanley Milgram, a psychologist known for his experiments on obedience to authority figures.

Obedience

The act of following orders or directions from an authority figure, often studied in psychology to understand social influence.