Windsor Company has outstanding both common stock and nonparticipating, non-cumulative preferred stock. The liquidation value of the preferred is equal to its par value. The book value per share of the common stock is unaffected by
A) the declaration of a stock dividend on preferred payable in preferred stock when the market price of the preferred is equal to its par value.
B) the declaration of a stock dividend on common stock payable in common stock when the market price of the common is equal to its par value.
C) the payment of a previously declared cash dividend on the common stock.
D) a 2-for-1 split of the common stock.

Question

Quizplus · Accepted Answer

The Answer of Windsor Company has outstanding both common stock and nonparticipating, non-cumulative preferred stock. The liquidation value of the preferred is equal to its par value. The book value per share of the common stock is unaffected by
A) the declaration of a stock dividend on preferred payable in preferred stock when the market price of the preferred is equal to its par value.
B) the declaration of a stock dividend on common stock payable in common stock when the market price of the common is equal to its par value.
C) the payment of a previously declared cash dividend on the common stock.
D) a 2-for-1 split of the common stock.

Windsor Company Has Outstanding Both Common Stock and Nonparticipating, Non-Cumulative