Question: A company declared a cash dividend on its common stock on December 15, 2011, payable on January 12, 2012. How would this dividend affect stockholders

A company declared a cash dividend on its common stock on December 15, 2011, payable on January 12, 2012.

How would this dividend affect stockholders’ equity on the following dates?

December 15, 2011 December 31, 2011 January 12, 2012

a. Decrease No effect Decrease

b. Decrease No effect No effect

c. No effect Decrease No effect

d. No effect No effect Decrease

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