 In this presentation, we will take a look at multiple choice questions related to corporations. First question, additional shares of its own stock to its stockholders without the receipt of any payment, either A. Stock dividend, B. Stock gift, C. Premium on stock, D. Discount on stock, or E. Treasury stock. Let's go through this again. Use the process of elimination to narrow this down. Additional shares of its own stock to its stockholders without the receipt of any payment. So we're giving additional shares of our stock or the company to our stockholders, the owners of the company, and we're not getting payment. We're not getting cash or any other form of payment for it. What would that be? We've got A. Stock dividend, maybe, because that does sound like if we're additional shares of stock to the stockholders, sounds like we're giving the stockholders something for nothing. So dividends is when we do that, if we give cash dividends, we're giving out earnings, this maybe we're giving out stock. So B says, I'll keep that for now, in other words, B says it's a stock gift. And you can think of it kind of like, I mean the corporation is gifting it to the shareholders. But that's kind of weird. You don't really, I mean the shareholders are the owners of the corporation. So it's not like the corporation is giving a gift to the owners because they're the owners. And so stock gift doesn't really sound like a thing, really. You might gift stock to a family member or something like that. But probably the corporation giving it to a stock hold doesn't sound right. I'm going to cross that out. B says premium on stock. So additional shares of its own stock. Premium on stock would say that we, that would mean that we issued it for maybe more than it's, that would mean that we got paid and somehow and we got paid more than maybe it's worth. We might think of a premium or something like that. So premium and discount seemed like type of terms we use when we sell something. And we didn't sell it here. We didn't get anything for it. So I don't think premium or discount, C or D sound right. And then E says treasury stock, which is another kind of term that maybe, you know, treasury stock is a thing. It sounds familiar. So I'll keep A and E for now. Let's go through it again. Additional shares of its own stock to its stockholders without the receipt of any payment is either A or E, either stock dividend or treasury stock. And if you think about it, it's going to be additional shares of stock to its, to its own shareholders without any payment. The corporation then is giving something to its shareholders, which sounds like a dividend. We're giving something, the corporation is giving something out of its earnings to the shareholder or giving something of value to the shareholder instead of giving money, they're going to give more value or more ownership of the corporation. So that's going to be a stock dividend is the more proper answer. Treasury stock represents something if we buy back our own stock. So final answer, A, let's go through it one more time. Additional shares of its own stock to its shareholders or stockholders without the receipt of any payment is A, stock dividend. Next question. Stock dividend is either A, it are repurchase of stock, should be it is, let's say it is repurchase of stock. B is a stock sale, C increases assets, D does not affect total equity but transfer amounts between the components of equity and E increases revenue. Let's go through this again and use the process of elimination. Stock dividends either A, I think it should be it is the repurchase of stock. So stock dividend repurchase of stock doesn't doesn't quite sound right because it's a dividend. So that means that you know dividend is us giving something to the owner. So it's not a cash dividend, it's a stock dividend. We're not really repurchasing stock doesn't sound right. And then B says is a stock sale and we're kind of giving it away but it's kind of similar like we're similar to a sale we're giving the stock to stock is going out. So maybe I'll keep that for now. C says increases assets, a stock dividend. So a dividend is us giving away part of the equity typically. So we're giving away part of equity in a stock if we're giving away stock is also part of equity doesn't seem like it has anything to do with assets we're not getting paid we're not getting any money. So I don't think it's going to increase the assets because we're not getting anything. So across that out D says does not affect total equity but transfers amounts between the components of equity and that sounds possible seems reasonable sounds like kind of complicated there but again if we see some answer like this that's very long detailed and seems to kind of hedge all its bets in a lawyerly like way to make sure that it possibly is fully correct is suspiciously correct to me. It seems like maybe they really tried really hard not to to cover every base to make sure the full statement is correct by having a more lawyerly type statement some I'm suspecting D here and then he says increases revenue and again a stock dividend is taking the revenue that we've earned and given it back basically to the owner so it's not going to do anything to revenue if anything you could think of it as decreasing like equity which revenue is a part of so he doesn't sound right I'm gonna keep it at B and D and go through this again stock dividend is either B or D either stock is a stock sale or does not affect total equity but transfers amounts between the components of equity and of those two I'd say that D's sounds more correct and it is more correct because it is the correct answer so and D that basically means that a you know a stock dividend means that we're gonna we're gonna give a dividend that will be stock and in essence we're taking it out of retained earnings just like we would on any type of dividend and then but and then it's gonna be kind of like the stockholder got cash and then reinvested it in other words we're gonna the other side of it's gonna go to common stock so two components of equity are going up and down retained earnings is going down because we issued the stock but we issued more stock which means more stock is out there which means we're gonna increase the common stock which is another component of equity total equity then not changing but the components of equity changing