A corporation's board of directors declares a dividend to common shareholders. This dividend consists of a specified amount of additional shares of common. This is what type of transaction?

Question

Quizplus · Accepted Answer

The declaration of a dividend in the form of additional shares of common is a claims exchange transaction as it involves the exchange of claims on the company's assets (dividend claims) into ownership claims (additional shares of common).

A Corporation's Board of Directors Declares a Dividend to Common