Asked by
Donald Thomas II
on Dec 16, 2024
Verified
On January 1 Key Corporation had 2000000 shares of $10 par value common stock outstanding. On March 31 the company declared a 20% stock dividend. Market value of the stock was $15/share. As a result of this event
A) Key's Paid-in Capital in Excess of Par account increased $2000000.
B) Key's total stockholders' equity was unaffected.
C) Key's Stock Dividends account increased $6000000.
D) All of these answer choices are correct.
Market Value
The prevailing market rate at which a service or asset is available for purchase or sale.
Paid-in Capital
The total amount of money investors have contributed to a company in exchange for shares of stock.
Stock Dividend
A dividend payment made in the form of additional shares rather than cash, increasing the number of shares owned by shareholders.
- Familiarize oneself with the concept of stock dividends and their consequences on the par value per share and the entire equity of stockholders.
- Gauge the financial outcomes of announcing and handing out both cash and stock dividends.
Verified Answer
ME
Learning Objectives
- Familiarize oneself with the concept of stock dividends and their consequences on the par value per share and the entire equity of stockholders.
- Gauge the financial outcomes of announcing and handing out both cash and stock dividends.