If a company declares a stock dividend, what is the effect on the shareholders' equity section and the ownership position of an individual shareholder?
$\begin{array}{ll}&\text { Shareholder's } & \text { Individual } \
&\text { Equity Section } & \text { Ownership Position }\\hline
A.&\text { Unchanged } & \text { Unchanged } \
B.&\text { Unchanged } & \text { Increased } \
C.&\text { Decreased } & \text { Unchanged } \
D.&\text { Decreased } & \text { Increased }
\end{array}$

Question

If a company declares a stock dividend, what is the effect on the shareholders' equity section and the ownership position of an individual shareholder? 
$\begin{array}{ll}&\text { Shareholder's } & \text { Individual } \
&\text { Equity Section } & \text { Ownership Position }\\hline 
A.&\text { Unchanged } & \text { Unchanged } \
B.&\text { Unchanged } & \text { Increased } \
C.&\text { Decreased } & \text { Unchanged } \
D.&\text { Decreased } & \text { Increased }
\end{array}$

Quizplus · Accepted Answer

When a company declares a stock dividend, the total shareholders' equity remains unchanged because the company is essentially reallocating part of its equity. The individual ownership position also remains unchanged in terms of percentage ownership of the company, as all shareholders receive additional shares proportionally.

If a Company Declares a Stock Dividend, What Is the Effect