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Up1
Which of
the following is least likely a valid
reason for declaring a stock dividend?- A. To increase total shareholders’ equity
- B. To increase the number of shareholders
- C. To increase shares trading volume
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Up3
B
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Up2
The correct answer is A.
Stock dividends:
· may result in an increase in shareholder base;
· may result in a lower price that may attract new investors; and
· do not affect the capital structure of the company, as it is a cash neutral exercise.
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