Asked by Alejandro Bernal on Jun 25, 2024
Verified
Declaration and distribution of a stock dividend does not affect the total amount of shareholders' equity.
Stock Dividend
A dividend payment made in the form of additional shares rather than a cash payout, increasing the number of shares owned.
- Grasp how transactions involving share capital and retained earnings affect a corporation's financial position.
Verified Answer
ME
Midnight EditingJul 01, 2024
Final Answer :
True
Explanation :
A stock dividend redistributes portions of equity from retained earnings to common stock, but the total shareholders' equity remains unchanged because it is merely an internal reallocation.
Learning Objectives
- Grasp how transactions involving share capital and retained earnings affect a corporation's financial position.