Please answer with reason why the option is correct and why the other options are not correct Share dividends***OA. have no effect on total shareholders' equityOB. are distributions of cash to the shareholdersOC. reduce the total assets of the corporationOD. increase the total liabilities of the corporation, and decrease the total shareholders' equity

Lets understand the basics. Common stockholders invested in stock in order to gain soeme return on…

Answered: Share dividends OA. have no effect on…

Cornerstones of Financial Accounting

4th Edition

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Jay Rich, Jeff Jones

Chapter10: Stockholder's Equity

Section: Chapter Questions

Problem 16MCQ

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Similar questions

The total amount of cash and other assets received by a corporation from the stockholders in exchange for the shares is ________. A. always equal to par value B. referred to as retained earnings C. always below its stated value D. referred to as paid-in capital
Which of the following is true of a stock dividend? A. It is a liability. B. The decision to issue a stock dividend resides with shareholders. C. It does not affect total equity but transfers amounts between equity components. D. It creates a cash reserve for shareholders.
Which of the following measures the portion of a corporations profit allocated to each outstanding share of common stock? A. retained earnings B. EPS C. EBITDA D. NOPAT
Owners equity represents which of the following? A. the amount of funding the company has from issuing bonds B. the sum of the retained earnings and accounts receivable account balances C. the total of retained earnings plus paid-in capital D. the business owners/owners share of the company, also known as net worth or net assets
Which statement regarding dividends is false?a. Dividends represent a sharing of corporate profits withowners.b. Both stock and cash dividends reduce retained earnings.c. Cash dividends paid to stockholders reduce net income.d. None of the above statements are false.
The following statements are true regarding dividends. Which of the following is incorrect? a) Dividends are distributions of earnings or capital to shareholders in proportion to their shareholdings. b) If an entity has a deficit, paying dividends is still considered legal. c) Liquidating dividends are distributions of capital to shareholders in proportion to their shareholdings. d) The common forms of dividends out of earnings are cash dividend, property dividend and share dividend.
All of the following are correct regarding stock dividends except: 1) total stockholders’ equity is the same before and after the stock dividend. 2) they usually result in a decrease in the stock price. 3) they are not taxable to the issuing corporation or the shareholders. 4) they result in a real economic gain in cash to the shareholders.
The peso equity in corporate capital for each share capital owned by a shareholder is known as? Question options: a. book value per share b. dividends per share c. earnings per share d. none of these
Which one of the following statements apply only to preference shareholders and not to equity shareholders a. Shareholders risk the loss of investment b. Shareholders bear the risk of no dividends in the event of losses c. Shareholders usually have the right to vote d. Dividends are usually given at a set amount in every financial year
The total amount of cash and other assets received by a corporation from the stockholders in exchange for the shares is __________Required to answer. Single choice. a. referred to as paid-in capital b. always below its stated value c. referred to as retained earnings d. always equal to par value
Choose the incorrect statement below: A. Retained earnings are the funds contributed by shareholders in excess of par or stated value.B. Equity is defined as the residual interest in the assets of an entity after deducting all of the liabilities.C. Conversion of preference shares into ordinary shares directly affects retained earnings.D. The statement of changes in equity is a formal statement that shows the movements in the elements or components of the shareholders' equity.
The cost of retained earnings is less than the cost of ordinary shares because of *a. the issuance cost.b. agency costs of free cash flow.c. the taxation on earnings.d. the trust fund doctrine.

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Share dividends OA. have no effect on total shareholders' equity OB. are distributions of cash to the shareholders OC. reduce the total assets of the corporation