If the firm's earnings remain constant and total cash dividends do not increase, a stock dividend results in a lower per-share market value for the firm's stock.

Name: If the firm's earnings remain constant and total cash dividends do not increase, a stock dividend results in a lower per-share market value for the firm's stock.
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Question

Quizplus · Accepted Answer

A stock dividend increases the number of shares outstanding, which typically dilutes the per-share market value if earnings and total cash dividends remain unchanged.

If the Firm's Earnings Remain Constant and Total Cash Dividends