A feature common to both stock splits and stock dividends is: a That there is no effect on total stockholders" equity. b. A reduction in the contributed capital of a corporation c. A transfer to earned capital of a corporation d. An increase in total liabilities of a corporation

Question

Sabrina Frye

Business

5 May, 14:16

A feature common to both stock splits and stock dividends is: a That there is no effect on total stockholders" equity. b. A reduction in the contributed capital of a corporation c. A transfer to earned capital of a corporation d. An increase in total liabilities of a corporation

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Answers (1)

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Slade Maynard · Answer 1

The answer is A.

Explanation:

A stock split is the act of increasing the number outstanding shares by issuing more shares to current shareholders. This means company's share price is increasing and doing well. A stock split has no effect on the total value of the stock and poses no real advantage to investors.

Stock dividends is a dividend payment made to the shareholders in the form of shares rather than cash. Stock dividend does not increase shareholders' wealth