Nontaxable stock dividends result in:
A) A higher cost per share for all shares than before the stock dividend.
B) A lower cost per share for all shares than before the stock dividend.
C) An increase in the total cost of the old and new stock combined.
D) A decrease in the total cost of the old and new stock combined.
E) None of the above.

Question

Quizplus · Accepted Answer

Nontaxable stock dividends result in a lower cost per share for all shares than before the stock dividend. This is because the total value of the shares remains the same, but the number of shares increases, leading to a decrease in the cost per share.

Nontaxable Stock Dividends Result In