True or False A. Niether stock dividends nor stock splits require the company to

Question

True or False

A. Niether stock dividends nor stock splits require the company to spend cash

B. Neither stock dividends nor stock splits affect the Retained Earnings of the company.

C. Neither stock dividends nor stock splits affect the Total Stockholders' Equity of the company.

D. Both stock dividends and stock splits may cause the market value of the company's stocks to decrease.

E. Both stock dividends and stock splits increase the number of shares of stock outstanding.

F. Both stock dividends and stock splits decrease the par value of the company's stock.

Explanation / Answer

A stock dividend is a dividend payment made in the form of additional shares rather than a cash payout, and stock split refers to the process in which additional shares are issued for every share.

In both the scenarios there is no cash payment by the company.

So statement A is true.

Statement B is also true because both does not affect retained earnings.

Stock dividend and stock split will increase the number of o/s shares, so the statement is C false.

Statement D is false.

Statement E is true.

Statement F is false.

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.