A Stock Dividend

Multiple Choice

A stock dividend:

A) Results in a transfer of retained earnings to capital in excess of par.
B) Increases the number of shares outstanding and involves a pro rata reduction in the par value per share.
C) Is accounted for in exactly the same manner as a stock split.
D) Results in a transfer of retained earnings to capital in excess of par and also increases the number of shares outstanding and involves a pro rata reduction in the par value per share.