CFA CFA Level 1 CFA Level 1 Question of the Week – Corporate Finance

CFA Level 1 Question of the Week – Corporate Finance

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    • Matt_AnalystPrep
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      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
    • moyo
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      B

    • Matt_AnalystPrep
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      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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