As a minimum, how large in relation to total outstanding shares may a stock distribution be before it should be accounted for as a stock split instead of a stock dividend?
A) No less than 2 to 5 percent
B) No less than 10 to 15 percent
C) No less than 20 to 25 percent
D) No less than 45 to 50 percent

Question

Quizplus · Accepted Answer

A stock distribution should be accounted for as a stock split instead of a stock dividend if it is no less than 20 to 25 percent of the total outstanding shares. This threshold helps differentiate between a dividend, which is typically a smaller distribution, and a split, which significantly increases the number of shares without changing the company's market capitalization.

As a Minimum, How Large in Relation to Total Outstanding