What is the difference between a stock split and a stock dividend?
What will be an ideal response?
A stock dividend entails the distribution of additional shares of stock in lieu of a cash payment. A stock split involves
exchanging more (or less in the case of a "reverse" split) shares of stock for the firm's outstanding shares. In both cases
the number of common shares outstanding changes, but the firm's investments and future earnings prospects do not.
In essence, the ownership pie is simply cut into more pieces (or fewer pieces in the case of a reverse split). The only
difference between a stock dividend and a stock split relates to their respective accounting treatments. Both represent a
proportionate distribution of additional shares to the current stockholders. However, for accounting purposes the stock
split has been defined as a stock dividend exceeding 25 percent. Thus, a stock dividend is conventionally defined as a
distribution of shares up to 25 percent of the number of shares currently outstanding.
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On December 20, 2017, Mr. and Mrs. Garrison purchased four tickets for a New Year's Eve party at their church, a qualified charitable organization. Each ticket cost $75 and had a fair market value of $50. The Garrisons gave two of the tickets to a needy family in the community. Mr. Garrison tended bar at the party from 8 p.m. to 4 a.m. and was paid $40. The usual charge for such services is $80. Immediately before midnight, Mr. Garrison pledged $200 to the building fund and delivered a check for that amount on January 2, 2018. Of the amounts described above, the total amount that the Garrisons can include as a charitable contribution deduction for 2017 on a joint return is
a. $340 b. $200 c. $140 d. $100
If you do not agree with your team's objectives:
A) Speak up and persuade the team that your objectives are better B) Quit the team C) Remain quiet and continue serving on the team D) None of the above