Question

A feature common to both stock splits and stock dividends is: a That there is no effect on total stockholders" equity . b.A reduction in the contributed capital of a corporation c. A transfer to earned capital of a corporation d. An increase in total liabilities of a corporation

Answer 1

Answer:

The answer is A.

Explanation:

A stock split is the act of increasing the number outstanding shares by issuing more shares to current shareholders. This means company's share price is increasing and doing well. A stock split has no effect on the total value of the stock and poses no real advantage to investors.

Stock dividends is a dividend payment made to the shareholders in the form of shares rather than cash. Stock dividend does not increase shareholders' wealth