Q1:

CBA Inc. has 250.000 shares outstanding with a $5 par value. The shares were

issued for $14. The stock is currently selling for $34. CBA has $5,080,000 in

retained earnings and has declared a stock dividend that will increase the number

of outstanding shares by 6%. What will be the capital in excess of par account

after the stock dividend?

(a) $7,685,000

(b) $2,685.000

(c) $8 10,000

(d) $2,385,000

Q2:

At what payout percentage is a stock dividend considered a stock split?

(a) 10%

(b) 15%

(c) 25%

(d) 33%

Q3:

In the initial stage (Stage I), the corporation:

(a) Has a product yet to be accepted in the marketplace

(b) Anticipates rapid growth in sales and earnings

(c) Needs all its earnings for reinvestment in new assets

( d) Al 1 of the above