Answer the following statements true (T) or false (F)
1. When a firm pays a stock dividend, the shareholder's proportion of ownership in a firm remains the same, and as long as the firm's earnings remain unchanged, so does his or her share of total earnings.
2. If a firm's earnings remain constant and total cash dividends do not increase, a stock dividend results in a lower per-share market value for the firm's stock.
3. The shareholder receiving a stock dividend receives a share of common stock of equal value to their existing shares of common stock.
4. After the stock dividend is paid, the per share value of a stockholder's stock will remain the same as the value before the stock dividend and, thus, the market value of his or her total holdings in the firm will remain unchanged.
5. A shareholder receiving a stock dividend typically receives nothing of value.
1. TRUE
2. TRUE
3. FALSE
4. FALSE
5. TRUE
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