A stockholder who receives a stock dividend would
A) expect the market price per share to increase.
B) own more shares of stock.
C) expect retained earnings to increase.
D) expect the par value of the stock to change.

Question

Quizplus · Accepted Answer

A stockholder who receives a stock dividend would own more shares of stock. This is because rather than receiving cash, the shareholder receives additional shares of stock in proportion to their existing holdings. This increases their overall ownership in the company without requiring them to invest more money. The market price per share may or may not increase following a stock dividend, as it depends on various factors such as the company's financial performance, market conditions, and investor sentiment. Retained earnings may or may not increase depending on whether the company chose to distribute or reinvest those earnings. The par value of the stock does not change with a stock dividend.

A Stockholder Who Receives a Stock Dividend Would