CMA Study Group

Stock Dividend

  • 1.  Stock Dividend

    Posted 26 days ago
    C is the correct answer here because the other choices are 100% incorrect. But I think C has some flaws. There is never a payment for stock dividends.

    Any thoughts?


  • 2.  RE: Stock Dividend

    Posted 23 days ago
    A is incorrect because the transaction is based on market value and NOT par value

    B is incorrect because 30% is considered a large stock dividend (greater than 25%) and this would be represented by a transfer from R/E to PIC based on par value.

    D is incorrect for obvious reasons.

    C is correct because the dividend is paid from R/E will result in a reduction to R/E based on the FMV of the stock.

    Michael Henry

  • 3.  RE: Stock Dividend

    Posted 22 days ago
    Thanks for the comment, Michael. 

    Here is what Gleim had to say about the question:

    Please note that the words payment and distribution are synonomous in this context. This question comes from a prior CMA exam. We are reluctant to change the wording of old exam questions because we believe that they are a good representation of the type of wording you may encounter when you sit for the exam.


  • 4.  RE: Stock Dividend

    Posted 22 days ago

    Omar Izz Eldeen
    Chief Financial Officer
    Saudi Arabia