All of these statements are true. A share dividend is a distribution of additional shares to its shareholders without receiving any payment, it transfers a portion of equity from retained earnings to contributed capital, and it is often referred to as a stock dividend. It does not reduce a corporation's assets and equity, as the distribution is made from retained earnings rather than cash reserves.

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A Share Dividend

Question 56

Multiple Choice

A share dividend

A) Is a distribution of additional shares to its shareholders without receiving any payment
B) Transfers a portion of equity from retained earnings to contributed capital
C) Is often referred to as a stock dividend
D) Does not reduce a corporation's assets and equity
E) All of these

Correct Answer: