Question

Houser Corporation owns 4,000,000 shares of stock in Baha Corporation. On December 31, 2012, Houser distributed these shares of stock as a dividend to its stockholders. This is an example of a
a. property dividend.
b. stock dividend.
c. liquidating dividend. d. cash dividend.

Answer 1

Answer:

The correct option is (a)

Explanation:

Property dividend is distributing assets as dividends to its stockholders. This distribution is not in the form of cash. It could be any asset including any stock that the organization holds with some other company.

In this case, Houser corporation distributes shares of Baha corporation to its shareholders as dividends. This is an example of property dividend.