The issuer of a 5% common stock dividend (small stock dividend) to common stockholders should debit stock dividends for an amount equal to the Multiple Choice Market value of the shares issued. Minimum legal requirements. Book value of the shares issued. Par or stated value of the shares issued.

The issuer of a 5% common stock dividend (small stock dividend) to common stockholders should debit stock dividends for an amount equal to the Market value of the shares issued.

A  company is said to have issued a small stock dividend when the number of shares is less than 25% of the outstanding common stock.  

The amount for recording a small stock dividend is determined by multiplying the market price on the date of declaration with the number of shares being issued as stock dividend.

If the company issues a large stock dividend, then the par value of the shares being issued is used to calculate the amount.

Thus, a small stock dividend is treated differently than a large stock dividend with respect to the price at which it is recorded.

Learn more about stock dividend here:

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