If a corporation declares a 10% stock dividend, then
A)the share price of the stock will most likely decline by about 9%.
B)the share price of the stock will most likely increase by about 10%.
C)the share price of the stock will most likely remain unchanged.
D)each shareholder will get a 10% cash rebate off his or her next round lot purchase of the stock.

Question

Quizplus · Accepted Answer

When a corporation declares a 10% stock dividend, the number of shares increases by 10%, which typically leads to a decrease in the share price to maintain the same market capitalization, often resulting in a price decline of about 9%.

If a Corporation Declares a 10% Stock Dividend, Then