Nice International originally issued 100,000 shares of common stock at a price of $20 per share. A year later, they distributed a 10% stock dividend to shareholders. At the time of the stock dividend, the share price had gone up to $24 per share. Which of the following statements is true?

Question

Quizplus · Accepted Answer

A stock dividend does not result in a gain or loss for the company. It is a distribution of additional shares to shareholders and is recorded by transferring an amount from retained earnings to common stock and additional paid-in capital.

Nice International Originally Issued 100,000 Shares of Common Stock at a Price