The effect of a stock dividend is to
A) change the composition of shareholders' equity.
B) decrease total assets and total liabilities.
C) decrease total assets and shareholders' equity.
D) increase the book value per share of common shares.

Question

Quizplus · Accepted Answer

A stock dividend changes the composition of shareholders' equity by transferring an amount from retained earnings to common stock and additional paid-in capital, but it does not affect total assets or liabilities.

The Effect of a Stock Dividend Is to