Stock, Dividends, Splits and REtained earnings

Question 1

How are property dividends measured?

Answer 1

At the market value of the asset distributed.

Question 2

Does the declaration of stock dividend cause a liability to be reported?

Answer 2

No

Question 3

When does the investor’s holdings increase in value?

Answer 3

Only if the stock price does not fall in proportion to the dividend.

Question 4

What is the primary device for communicating the intention of management to restrict dividends, so that cash will be conserved for the specified purpose?

Answer 4

An appropriation of retained earnings.