Use the Following Information to Answer the Following Question(s)

question 112

Multiple Choice

Use the following information to answer the following question(s) .
Your firm is planning to pay a 15% share dividend.The market price for the share has been $84.The table below presents the equity portion of your firm's balance sheet before the dividend.
Common share

-Which of the following would result from payment of the share dividend?

• A)Total equity would remain at $50,000,000.
• B)Total equity would increase to $57,500,000.
• C)Total equity would decrease to $43,478,261.
• D)The effect on the equity account would depend on the market's reaction to the dividend.

---

Definitions:

Equilibrium Price

The charge where the amount of merchandise supplied equals the amount consumers are willing to purchase.

Inelastic Demand

A situation where the demand for a product does not significantly change with a change in price.

Elastic Supply

A situation where the supply of a good changes significantly when its price changes.

Tax Burden

The measure of the impact of taxation on an individual's or entity's income, assets, or purchasing power.