1

After a stock dividend, the percentage of the company owned by each shareholder

increases.

remains unchanged.

decreases.

may increase or decrease depending on the ratio of the stock dividend.

2.

Profit for Sandos Inc., was $10,000 in 2017. Shareholders equity was $100,000 at December 31 2015, $200,000 at December 31, 2016, and $300,000 at December 31, 2017. Return on equity for 2017 is

5%.

4%.

3.3%.

10%.

3.

In order to pay a dividend the company must:

ensure their legal capital is maintained.

have all of these.

have a declaration of dividends by the board of directors.

have enough cash on hand to pay for its ongoing operations as they become due.

4

Preferred shareholders have a priority over common shareholders as to:

both dividends and assets in the event of liquidation.

voting rights.

dividends.

assets in the event of liquidation.