If the total assets of a firm are unaffected by a stock dividend, then:
A) the stock should retain the same price per share.
B) stock dividends should be preferred by corporations over cash dividends.
C) an investor's wealth should not be changed by the dividend.
D)only bondholders benefit from stock dividends.

Question

Quizplus · Accepted Answer

Stock dividends distribute additional shares to shareholders, not cash, so the total value of an investor's holdings doesn't change, just the number of shares they own. This action doesn't directly affect the firm's total assets or the investor's wealth.

If the Total Assets of a Firm Are Unaffected by a Stock