A stock dividend differs from a stock split,in that:
A) The amount of a stock dividend is fully taxable, whereas there is no tax implication with a stock split.
B) Stock dividends increase the number shares greater than 25 percent, whereas stock splits increase shares by less than 25 percent
C) Stock splits always increase the average share price whereas for stock dividends the price would remain the same
D) Stock splits have an impact on retained earnings, whereas stock dividends have no impact

Question

Quizplus · Accepted Answer

A stock dividend is considered income and may be taxable, whereas a stock split is not a taxable event as it merely increases the number of shares while reducing the price per share proportionally.

A Stock Dividend Differs from a Stock Split,in That