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Question(s) / Instruction(s):

A company originally issued 50,000 shares of $5 common stock at $9. The board of directors declares a 10% stock dividend when the market price of the stock is $10 a share. Which of the following is the net effect of the stock dividend?  

a)            Assets are decreased, liabilities are decreased and common stock is increased.  

b)            Assets are increased, liabilities are decreased and common stock is decreased.  

c)            Assets are decreased, liabilities are increased and common stock is increased.  

d)            None of the above happens.  

  

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