Which type of dividends do NOT reduce total shareholders' equity?
A) cash dividends
B) stock dividends
C) property dividends
D) liquidating dividends

Question

Quizplus · Accepted Answer

Stock dividends do not reduce total shareholders' equity. Instead, they distribute a portion of the company's retained earnings in the form of additional shares of stock. This means that although the number of shares outstanding increases, the overall value of each share remains the same, and therefore total shareholders' equity is not reduced.

Which Type of Dividends Do NOT Reduce Total Shareholders' Equity