Which of the following statements is correct regarding the declaration of a stock dividend by a corporation having only one class of par value stock?
A. A stock dividend has the same legal and practical significance as a stock split.
B. A stock dividend increases a stockholder's proportionate share of corporate ownership.
C. A stock dividend causes a decrease in the assets of the corporation.
D. A stock dividend is a corporation's ratable distribution of additional shares of stock to its stockholders.
Answer: D. A stock dividend is a corporation's ratable distribution of additional shares of stock to its stockholders.
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