We can be sure that,in and of itself,a stock dividend will not affect which of the following financial aspects of the firm? (Assume the stock has a par value. )
A) Market value per share.
B) Book value per share.
C) Common stock account.
D) Paid-in capital account.
E) Total assets.

Question

Quizplus · Accepted Answer

A stock dividend does not affect the total assets of the firm. It only changes the composition of the equity accounts by transferring an amount from retained earnings to the common stock and additional paid-in capital accounts, without any change in the par value of the stock. Therefore, choices A, B, C, and D are incorrect because a stock dividend may have an impact on these financial aspects of the firm.

We Can Be Sure That,in and of Itself,a Stock Dividend