The effect of recording a 100 percent stock dividend would be to:

Question

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Recording a 100 percent stock dividend will increase the number of shares outstanding without changing the total value of the company. This will result in a decrease in earnings per share as the company's earnings will be spread across more shares. Additionally, the book value per share will also decrease as the total value of the company remains the same but is now spread across more shares. The working capital, however, will remain unaffected as it is a measure of the company's current assets and liabilities.

The Effect of Recording a 100 Percent Stock Dividend Would