For small stock dividends, by what amount are retained earnings reduced?
A) Par value of the dividend
B) Book value of the dividend
C) Par value of the stock
D) Market value of the dividend

Question

Quizplus · Accepted Answer

For small stock dividends, retained earnings are reduced by the market value of the shares. For large stock dividends, retained earnings are reduced by the par value of the shares.

For Small Stock Dividends, by What Amount Are Retained Earnings