Hi,

Which of the following statements is FALSE and why?

A.Stock dividends of 50% or higher are generally referred to as stock splits.

B.With a stock dividend, a firm does not pay out any cash to shareholders. As a result, the total market value of the firm's assets and liabilities, and therefore of its equity, is unchanged.

C.If the price of the stock falls too low, a company can engage in a reverse split and reduce the number of shares outstanding.

D.Rather than pay a dividend using cash or shares of its own stock, a firm can also distribute shares of a subsidiary in a transaction referred to as a

offshoot.