Property dividends are valued using:
A)the most recent cash dividend paid by the corporation.
B)the fair market value of the asset given up.
C)the book value of the asset given up.
D)the balance in the corporation's retained earnings account.

Question

Quizplus · Accepted Answer

Property dividends are valued based on the fair market value of the asset given up, not on past cash dividends, book value, or retained earnings. Fair market value is the price at which the asset would be sold in an arm's length transaction between willing parties, and is considered the most accurate way to value a property dividend.

Property Dividends Are Valued Using