How Would the Declaration of a 20 Percent Stock Dividend

question 6

Multiple Choice

How would the declaration of a 20 percent stock dividend by Astros Corporation affect each of the following on Astros' balance sheet? Retained Total Stock-
Earnings holders' Equity

• A) Decrease Decrease
• B) Decrease No effect
• C) No effect Decrease
• D) No effect No effect

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Definitions:

GDP

The entirety of value generated from goods and services within a country's borders throughout a specific duration sums up what is known as the Gross Domestic Product.

Government Purchases

Expenditures by government for goods and services that directly satisfy collective needs or affect the economy’s total demand.

Investment

Investment pertains to the allocation of resources, such as capital or time, with the expectation of generating an income or profit.

Services

Economic activities that provide intangible products, such as healthcare, education, and financial services, to consumers.