All of the Following Statements Regarding Stock Dividends Are True

Multiple Choice

All of the following statements regarding stock dividends are true except:

A) Directors can use stock dividends to keep the market price of the stock affordable.
B) Stock dividends provide evidence of management's confidence that the company is doing well.
C) Stock dividends do not reduce assets or equity.
D) Stock dividends decrease the number of shares outstanding.
E) Stock dividends transfer a portion of equity from retained earnings to contributed capital.