Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please see statements below and give comments (short explanations) if they FALSE/TRUE. When a firm pays a stock dividend, the shareholder's proportion of ownership in

Please see statements below and give comments (short explanations) if they FALSE/TRUE.

When a firm pays a stock dividend, the shareholder's proportion of ownership in a firm remains the same, and as long as the firm's earnings remain unchanged, so does his or her share of total earnings.

If a firm's earnings remain constant and total cash dividends do not increase, a stock dividend results in a lower per-share market value for the firm's stock.

After the stock dividend is paid, the per share value of a stockholder's stock will remain the same as the value before the stock dividend and, thus, the market value of his or her total holdings in the firm will remain unchanged.

In a 2-for-1 stock split, the number of shares outstanding decreases by fifty percent and the stock's per share par value will double.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Aircraft Finance Strategies For Managing Capital Costs In A Turbulent Industry

Authors: Bijan Vasigh, Reza Taleghani, Darryl Jenkins

1st Edition

1604270713, 9781604270716

More Books

Students also viewed these Finance questions

Question

Describe the concept of corporate social responsibility.

Answered: 1 week ago

Question

Explore the concept of business ethics.

Answered: 1 week ago

Question

Discuss human resource management issues for small businesses.

Answered: 1 week ago