Which of the following is not a direct result of a stock dividend?
A)the number of shares outstanding is increased
B)the market price of each outstanding share is increased
C)the amounts shown in the firm's capital accounts are redistributed
D)the per-share price of the stock goes up

Question

Quizplus · Accepted Answer

A stock dividend increases the number of shares outstanding, which inherently dilutes the value of each share. As a result, the market price of each outstanding share usually decreases, not increases. Option A and C are direct results of a stock dividend, and option D can be a common misconception but is not necessarily guaranteed.

Which of the Following Is Not a Direct Result of a Stock