With respect to a company distributing a stock dividend, which of the following is FALSE?
A)The share capital account remains unchanged.
B)The overall value of the firm remains unchanged.
C)The corporation distributes additional stock certificates.
D)There is no proportionate change in ownership.

Question

Quizplus · Accepted Answer

The share capital account actually decreases when a stock dividend is distributed, as the corporation is distributing its own shares rather than cash or assets. The overall value of the firm and proportionate ownership also remain unchanged. The corporation does distribute additional stock certificates to shareholders.

With Respect to a Company Distributing a Stock Dividend, Which