Sam owns 5,000 shares of stock in Global X Corporation with a market value of $15,000.Global X declares a 20% stock dividend.After the dividend is paid,Sam owns
A) 6,000 shares with a market value of $18,000.
B) 6,000 shares with a market value of $15,000.
C) 5,100 shares with a market value of $15,300.
D) 5,000 shares with a market value of $18,000.

Question

Quizplus · Accepted Answer

A 20% stock dividend means Sam receives 20% more shares, so he gets 1,000 additional shares (20% of 5,000), totaling 6,000 shares. The market value remains the same at $15,000 because the stock dividend does not change the overall value of the investment, just the number of shares.

Sam Owns 5,000 Shares of Stock in Global X Corporation