Question

Identify the effect the declaration and distribution of a stock dividend has on the par value...

Identify the effect the declaration and distribution of a stock dividend has on the par value per share.

a.   Increase

b.   Decrease

c.   Increase or decrease

d.   No effect

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Homework Answers

Answer #1

Correct answer is D

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Par value of the stock will not change with the stock dividend.

When the dividend is declared (Stock), the amount will be deducted from the retained earnings and transferred to the paid in capital account.

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