When a Share Dividend of 20 000 $1 Shares, Is

question 62

Multiple Choice

When a share dividend of 20 000 $1 shares, is declared and paid, the effect on total equity in the company balance sheet is a(n) :

• A) increase in share capital of $20 000 and a decrease in reserves of $20 000, i.e. no change in total equity.
• B) increase in total equity of $20 000.
• C) decrease in total equity of $20 000.
• D) increase in the number of issued shares and a decrease in the book value of each share.

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Definitions:

Higher Price

An elevated cost or valuation of a product or service compared to previous levels.

Market

A place or mechanism where buyers and sellers of goods, services, or resources interact to exchange these commodities at prices determined by supply and demand.

Second-Degree Price Discrimination

A pricing strategy where prices vary according to quantity demanded or consumption levels, rather than across different consumer types.

Inverse Demand Function

A mathematical representation that expresses price as a function of quantity demanded, illustrating the relationship between the two inversely.