{"id":189281,"date":"2025-02-09T03:30:46","date_gmt":"2025-02-09T03:30:46","guid":{"rendered":"https:\/\/learnexams.com\/blog\/?p=189281"},"modified":"2025-02-09T03:30:48","modified_gmt":"2025-02-09T03:30:48","slug":"which-of-the-following-statements-are-true-regarding-dividends","status":"publish","type":"post","link":"https:\/\/www.learnexams.com\/blog\/2025\/02\/09\/which-of-the-following-statements-are-true-regarding-dividends\/","title":{"rendered":"Which of the following statements are true regarding dividends"},"content":{"rendered":"\n

Which of the following statements are true regarding dividends?<\/p>\n\n\n\n

Select all that apply<\/p>\n\n\n\n

1. A large stock dividend is a distribution of more than 25% ?of previously outstanding shares.<\/p>\n\n\n\n

2. A stock split can be used to keep the stock price affordable.<\/p>\n\n\n\n

3. A small stock dividend is a distribution of 50% ?or less of previously outstanding shares.<\/p>\n\n\n\n

4. The date of payment reflects the date a cash dividend is paid to stockholders.<\/p>\n\n\n\n

The correct answer and explanation is:<\/mark><\/strong><\/p>\n\n\n\n

Correct Answers:<\/h3>\n\n\n\n

\u2705 1. A large stock dividend is a distribution of more than 25% of previously outstanding shares.<\/strong>
\u2705 2. A stock split can be used to keep the stock price affordable.<\/strong>
\u2705 4. The date of payment reflects the date a cash dividend is paid to stockholders.<\/strong><\/p>\n\n\n\n

Explanation:<\/h3>\n\n\n\n

Dividends are distributions of a company’s earnings to its shareholders. They can be in the form of cash dividends, stock dividends, or property dividends<\/strong>. Here\u2019s why the selected statements are correct:<\/p>\n\n\n\n

    \n
  1. A large stock dividend is a distribution of more than 25% of previously outstanding shares.<\/strong>
    A stock dividend is when a company issues additional shares to shareholders instead of paying cash. A large stock dividend<\/strong> is defined as distributing more than 25% of outstanding shares<\/strong>, while a small stock dividend<\/strong> typically distributes less than 25%<\/strong>. Large stock dividends impact stock prices significantly because they increase the number of shares available.<\/li>\n\n\n\n
  2. A stock split can be used to keep the stock price affordable.<\/strong>
    A stock split<\/strong> increases the number of outstanding shares while reducing the price per share proportionally. This strategy makes shares more affordable to investors and increases market liquidity. For example, in a 2-for-1 stock split<\/strong>, a shareholder with 100 shares at $100 each would now have 200 shares at $50 each.<\/li>\n\n\n\n
  3. The date of payment reflects the date a cash dividend is paid to stockholders.<\/strong>
    The date of payment<\/strong> is the final step in the dividend process when the company distributes cash to shareholders. Key dates include:\n
      \n
    • Declaration Date:<\/strong> The board announces the dividend.<\/li>\n\n\n\n
    • Ex-Dividend Date:<\/strong> Investors buying after this date will not receive the dividend.<\/li>\n\n\n\n
    • Record Date:<\/strong> Determines who is eligible for the dividend.<\/li>\n\n\n\n
    • Payment Date:<\/strong> The date shareholders receive the cash dividend.<\/li>\n<\/ul>\n<\/li>\n<\/ol>\n\n\n\n

      Statement 3 is incorrect<\/strong> because a small stock dividend is usually less than 25%<\/strong>, not 50% or less<\/strong>.<\/p>\n","protected":false},"excerpt":{"rendered":"

      Which of the following statements are true regarding dividends? Select all that apply 1. A large stock dividend is a distribution of more than 25% ?of previously outstanding shares. 2. A stock split can be used to keep the stock price affordable. 3. A small stock dividend is a distribution of 50% ?or less of […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-189281","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/189281","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=189281"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/189281\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=189281"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=189281"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=189281"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}