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Which one of the following statements regarding dividends is correct?

A. A stock dividend of15% of the outstanding common shares results in a debit to retained earnings at the par value of the stock distributed.

B. At the declaration date of a30% stock dividend, the carrying value of retained earnings will be reduced by the fair market value of the stock distributed.

C. The declaration of a cash dividend will have no effect on book value per share.

D. The declaration and payment of a10% stock dividend will result in a reduction of retained earnings at the fair market value of the stock.

According to US GAAP

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Question added by Deleted user
Date Posted: 2015/02/27
ايمن محمد عاطف محمد
by ايمن محمد عاطف محمد , Director of the control and regulation unit , ACOLID

C. The declaration of a cash dividend will have no effect on book value per share.

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