Statements about dividends

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Which of the following statements about dividends is false?

Stock dividends increase the number of shares of stock issued and outstanding.

Cash dividends become a liability to the corporation when declared by the board of directors.

Cash dividends will reduce a company's net income.

Cash dividends and stock dividends reduce retained earnings.

2. Snapper Company issued a bond with the following characteristics on January 1, 2013. Face Value: $10,000 Stated Rate: 5.5% Market Rate: 6.0% Maturity: 20 years Issue Price: $9,400 How much cash interest will be paid to the bondholders each semi-annual interest payment date?

$282

$300

$275

$550

Reference no: EM131285079

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