A company declares a 40% stock dividend when there are 4.0 million common shares outstanding with a Tk.1 per value. Their current market price is Tk. 20 per share. Which of the following will be the effect of the stock dividend ?
A. Retained earnings will decrease by Tk. 1.6 million and contributed capital will increase by Tk 1.6 million.
B. Contributed capital will decrease by Tk 1.6 million and retained earnings will increased by Tk. 1.6 million
C. Retained earnings will decrease by Tk. 32 million and contributed capital will increase by Tk. 32 million
D. Contributed capital will decrease by Tk. 32 million and retained earnings will increase by Tk. 32 million
সঠিক উত্তরঃ
A.
Retained earnings will decrease by Tk. 1.6 million and contributed capital will increase by Tk 1.6 million.
