P Info Online Decor Shioppur Travel Jobs study hel BRID 12351 - ACCT 2013-13Y (2

Question

P Info Online Decor Shioppur Travel Jobs study hel BRID 12351 - ACCT 2013-13Y (27 complete) HW Score Niether stock dividends nor stock splits require the company to spend cash. O True O False Neither stock dividends nor stock splits affect the Retained Earnings of the company. O True O False Neither stock dividends nor stock splits affect the Total Stockholders' Equity of the company O True O False Both stock dividends and stock splts may cause the market value of the company's stocks to decrease O True O False Both stock dividends and stock splits increase the number of shares of stock outstanding O True O False Both stock dividends and stock splits decrease the par value of the company's stock O True OFalse

Explanation / Answer

a. True

Reason- Stock dividend is payment of dividend in form shares and not cash. Stock Split is an activity which divides existing shares into multiple shares involving no cash transaction.

b. False

Stock dividend impact on retained earnings, since dividend is a paid from retained earnings

c. True

In both case of stock dividend and stock split, shares are issued to existinng shareholders. Hence it does not impact no of stock holders

d. False

Only stock dividend may reduce market price of a share since stock dividend lead to reduction in retained earnings.

e. True

Both Stock dividend and stock split involves issue of new shares hence both the activities leads to increase in number of shares

f. False

Only Stock split reduces the par value of the share.

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