Diluted earnings per share shows dilution resulting from additional shares that may be issued for stock options or bonds that may be converted to shares of common stock in the future.     True     False

X Your answer is incorrect. The effect of a stock dividend is to O change the composition of stockholders' equity. O decrease total assets and stockholders' equity. O increase the book value per share of common stock. O decrease total assets and total liabilities. eTextbook and Media Assistance Us Save for Later Attempts: 1 of 2 used Submit Answ @ %23 %24 8 4. u e d n m C

Cumulative preferred stock O requires dividends in arrears to be paid before the firm can pay dividends on common. O has a right to vote cumulatively. O has a claim to dividends before bonds. Ohas a higher required return than common stock.

22-All of the following statements regarding stock dividends are true except: Top of Form Multiple Choice Stock dividends transfer a portion of equity from retained earnings to contributed capital. Stock dividends provide evidence of management's confidence that the company is doing well. Stock dividends decrease the number of shares outstanding. Directors can use stock dividends to keep the market price of the stock affordable. Stock dividends do not reduce assets or equity. Bottom of Form