Question
Silver Corp. declares a 15% stock dividend to its shareholders on 1/18. On that date, the company had 15,000 shares issued and 12,000 shares outstanding.
Silver Corp. declares a 15% stock dividend to its shareholders on 1/18. On that date, the company had 15,000 shares issued and 12,000 shares outstanding. Silver Corp. common stock has a par value of $0.50 and a fair market value of $12.75. Silver Corp. distributed the stock the dividend to its shareholders on 1/22. On 2/12 Silver Corp. declares a 2 for 1 stock split. ______________________ What is the impact of distributing the stock dividend on Silver Corp.s Net Income?
Distributing a stock dividend does not impact net income.
Silver Corp.'s Net Income will be reduced by $28,687.50.
Silver Corp.'s Net Income will be reduced by $27,562.50
Silver Corp.'s Net Income will be reduced by $22,950.
Silver Corp.'s Net Income will be reduced by $21,150.
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