If a company's common shares trade at relatively very low prices, that company would be

most likely to consider the use of a:

A$.$ stock split.

B$.$ stock dividend.

C$.$ reverse stock split.

In a recent presentation, Doug Pearce made two statements about dividends:

Statement $1$: "A stock dividend will increase share price, all other things being equal."

Statement $2$: "One practical concern with a stock split is that it will reduce the company's

price$-$to$-$earnings ratio."

Are Pearce's two statements about the effects of the stock dividend and stock split

correct?

A$.$ No for both statements.

B$.$ Yes for Statement $1$ and No for Statement $2.$

C$.$ No for Statement $1$ and Yes for Statement $2.$

All other things being equal, the payment of an internally financed cash dividend is most

likely to result in:

A$.$ a lower current ratio.

B$.$ a higher current ratio.

C$.$ the same current ratio.