FASB assumes that if the number of shares issued in a stock dividend is large enough to

Question:

FASB assumes that if the number of shares issued in a stock is large enough to materially reduce the per-share market value, it is inappropriate to record the impact using the firm’s market value. What is the preferred treatment in such cases? Does FASB provide a guideline as to the percentage of previously out- standing shares that would qualify for the treatment?

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...