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Hello students, here is a question.
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Which of the following statement about the stock dividend is true? so, we have an options given here.
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The first is a stock dividend is a stock dividend is the only type of dividend that does not that does not reduce shareholders equity.
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And option b is a stock dividend is a stock dividend is the only type of dividend that does not reduce retained earning.
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And the third is a stock dividend does not affect par value per share.
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A stock dividend does not affect par value per share.
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And the fourth is a stock dividend may or may not may or may not affect paid -in capital in excess of par.
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So these are the four options given here.
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We have to choose the right option from this.
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The stock dividend is only the type of dividend that does not reduce the shareholders equity.
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This statement is true.
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As a stock dividend involves issuing an additional share to existing shareholders which does not reduce the overall equity.
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Stock dividend is only the type of dividend that does not reduce a retained earning...