48) When the corporation declares a stock dividend, a stockholder\'s percentage

Question

48) When the corporation declares a stock dividend, a stockholder's percentage ownership in the stock of the corporation A) will increase C) can increase or decrease B) will decrease D) remains unchanged 49) New Corporation had net income for 2016 of $79,000. New Corporation had 13,000 shares of common stock outstanding at the beginning of the year and 18,000 shares of common stock outstanding at the end of the year. There were 11,000 shares of preferred stock outstanding all year. During 2016, New Corporation declared and paid preferred dividends of $16,000. What is New Corporation's earnings per share? (Round the answer to two decimal places) A) $5.10 B) $4.39 C) $3.50 D) $4.06

Explanation / Answer

Solution 48:

When a corporation declares stock dividend, then a stockholder's percentage ownership in the stock will increase.

As declaration od stock dividend will increase the number of shares which is hold by stockholders.

So correct answer is A.

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