Question: On March 1 , 2 0 1 2 Garrison, Incorporated declared the annual cash dividend on its 1 , 5 0 0 outstanding shares of

On March 1,2012 Garrison, Incorporated declared the annual cash dividend on its 1,500 outstanding shares of $5 par value, 5% noncumulative preferred stock. The dividend will be paid on May 1,2012, to the stockholders of record as of April 1,2012.
What effect will the declaration and distribution of a stock dividend have on net income and cash flows?
no effect on net income or cash flows
no effect on net income, decrease cash flows
decrease net income, decrease cash flows
increase net income, no effect on cash flows

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