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Which of the Following Stock Dividends Would Be Tax-Free to the Shareholder

Question 51

Multiple Choice

Which of the following stock dividends would be tax-free to the shareholder?


A) A 2-for-1 stock split to all holders of common stock.
B) A stock dividend where the shareholder could choose between cash and stock.
C) A stock dividend to all holders of preferred stock.
D) A 2-for-1 stock split to all holders of common stock and a stock dividend to all holders of preferred stock are tax-free to the shareholder.

Correct Answer:

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