Which of the following statements about small stock dividends is true?
a. A debit to retained earnings for the par value of the shares issued should be made.
b. A small stock dividend decreases total stockholders' equity.
c. Market value per share should be assigned to the dividend shares.
d. A small stock dividend ordinarily will have no effect on book value per share of stock.
Dividend refers to a part of profits that is distributed among the shareholders. These are the rewards for the shareholders and investors declared by public companies for boosting up the confidence of the stakeholders. A company can declare various types of dividends including cash dividend, stock dividend etc.
Answer and Explanation: 1
c is the correct option
A stock dividend refers to a payment given to shareholders in the form of shares instead of paying cash. At the...
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fromChapter 22 / Lesson 11
Dividends are corporate profits distributed to shareholders. Take a closer look at dividends in depth and unpack two kinds of stocks in which people can invest--common stock and preferred stock--along with the advantages and disadvantages of each.