Question 6 Which of the following transactions will affect a corporation\'s reta

Question

Question 6

Which of the following transactions will affect a corporation's retained earnings?

stock repurchase

stock split

stock dividend

reverse stock split

Question 7

The ex-dividend date is ________ the holder of record date.

2 days before.

5 days before.

2 weeks before.

3 days after.

Question 8

A firm currently has 200,000 shares of stock outstanding at a market price per share of $60. Today, the firm announced a 3-for-1 stock split. What will the price per share be after the split?

$10.00                            

$20.00                        

$40.00                   

$60.00

Question 9

A firm has 50,000 shares of stock outstanding, net income of $100,000, and a PE ratio of 15. What will the firm's PE ratio be if the firm issues additional 10,000 new shares? Assume all else remains constant.

12.0              

13.0                                        

15.0                               

18.0

Question 10

An investor owns 1000 shares of stock in ABC Corp. with a market value of $1,000. ABC declares a 20% stock dividend. After the dividend is paid, John owns____________

1200 shares with a market value of $1,000.

1000 shares with a market value of $1,200.

1200 shares with a market value of $1,200.

1000 shares with a market value of $1,000.

stock repurchase

stock split

stock dividend

reverse stock split

Explanation / Answer

Question 6)

When stock dividend is paid, retained earnings will decrease and common stock par and paid in capital in excess of par.

Hence, correct option is stock dividend.

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