Stock dividends and stock splits are similar in all of the following ways except:
A)they both involve a pro rata distribution of shares to existing stockholders.
B)they both reduce the stock price.
C)they both decrease Retained Earnings.
D)they both have no effect on cash.

Question

Quizplus · Accepted Answer

Both stock dividends and stock splits increase the number of shares outstanding and decrease the per-share market price.A key difference between them is that a stock dividend causes a reduction in Retained Earnings,whereas a stock split doesn't.

Stock Dividends and Stock Splits Are Similar in All of the Following