ACC 304 All Assignments ACC 304 All Assignments | Page 35

18. Stock splits and large stock dividends have the same effect on a
company’s retained earnings and total stockholders’ equity.
19. The rate of return on common stock equity is computed by
dividing net income by the average common stockholders’ equity.
20. The payout ratio is determined by dividing cash dividends paid
to common stockholders by net income available to common
stockholders.
True-False Answers—Conceptual
MULTIPLE CHOICE—Conceptual
21.
The residual interest in a corporation belongs to the