Which of the following is not true about a stock dividend

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Which of the following is not true about a stock dividend?

With a stock dividend, the firm issues a percentage of outstanding stock as new shares to existing shareholders.

The overall effect of a stock dividend is to leave total stockholders' equity and each owner's share of stockholders' equity unchanged.

In theory, with a stock dividend, total market value considering all outstanding shares should not change.

Since the number of shares changes under a stock dividend, any ratio based on the number of shares must be restated.

The accounting for a stock dividend, assuming the distribution is relatively small, requires that the par value of the stock be removed from retained earnings.

 

Reference no: EM13284253

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