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Anarel [89]
3 years ago
5

Carr Corp. declared a 7% stock dividend on its common stock. The dividend:

Business
1 answer:
oksano4ka [1.4K]3 years ago
4 0

Answer:

C) has no effect on Carr's earnings and profits for federal income tax purposes.

Explanation:

A stock dividend means that the corporation issues its existing shareholders more stock.

In essence, the corporation is merely diluting the proportional ownership interest of existing shares.

This has no effect on the corporation's earnings and profits for federal income tax purposes.

Therefore, the dividend has no effect on Carr's earnings and profits for federal income tax purposes.

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