Michigan Steamers has 3,800 shares of $22 par value common stock outstanding. During the current year, the company distributed a 4% stock dividend. The market value of the stock at that time was $17 per share. Bailey's total stockholders' equity should increase or decrease by:

Question

Quizplus · Accepted Answer

A stock dividend redistributes shares to existing shareholders without changing the total stockholders' equity. The value of the equity remains the same; it's just represented by a greater number of shares after the dividend.

Michigan Steamers Has 3,800 Shares of $22 Par Value Common