Are You a Stock Dividend and Stock Split Expert?

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Questions and Answers

What is a stock dividend?

  • A distribution that is not made out of the corporation's earnings and profits
  • A decrease in the number of shares of stock outstanding
  • The right to purchase additional shares of stock at a specified price
  • A distribution of additional shares of stock to some shareholders of record (correct)

What is a stock split?

  • A distribution of additional shares of stock to some shareholders of record
  • An increase in the number of shares of stock outstanding, without any change in the par value of the shares (correct)
  • The right to purchase additional shares of stock at a specified price
  • A distribution that is not made out of the corporation's earnings and profits

What are stock rights?

  • The right to purchase additional shares of stock at a specified price (correct)
  • A distribution of additional shares of stock to some shareholders of record
  • A decrease in the number of shares of stock outstanding
  • A distribution that is not made out of the corporation's earnings and profits

What are taxable distributions?

<p>Distributions that are made out of the corporation's earnings and profits (C)</p> Signup and view all the answers

Are non-taxable distributions taxed to the shareholders?

<p>No, regardless of the holding period of the shares (B)</p> Signup and view all the answers

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