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When the corporation declares a stock dividend, a stockholder's percentage ownership in the stock of the corporation:_______

A) will increase
B) can increase or decrease
C) will decrease
D) remains unchanged

User Nealon
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1 Answer

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D. Remains unchanged. Stock dividends are paid as a percentage of existing stock. So, if a company has 100 outstanding stocks and they declared a 5% stock dividend, the company would issue 5 new stocks. If there were 5 stockholders, all with 20 stocks each they would each receive 1 new stock from the dividend. They would have more stocks but their ownership percentage would not change.
User Mark Locker
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