In stock dividend:

The correct answer is: C. Face value per share decreases.

A stock dividend is a dividend paid in additional shares of stock rather than in cash. The face value of the shares remains the same, but the number of shares outstanding increases. This can cause the market price per share to decrease, as the total value of the company remains the same but is now spread over more shares.

Authorized capital is the maximum number of shares that a company is allowed to issue. Paid-up capital is the amount of money that has been invested in the company by shareholders. Neither of these values changes when a stock dividend is issued.

Here is a more detailed explanation of each option:

• A. Authorized capital always increases. This is not true. Authorized capital is the maximum number of shares that a company is allowed to issue. It is set by the company’s articles of incorporation and cannot be changed without the approval of shareholders. When a stock dividend is issued, the number of shares outstanding increases, but the authorized capital does not change.
• B. Paid up capital always increases. This is also not true. Paid-up capital is the amount of money that has been invested in the company by shareholders. It is equal to the number of shares issued multiplied by the face value of each share. When a stock dividend is issued, the number of shares outstanding increases, but the face value of each share remains the same. Therefore, paid-up capital does not change.
• C. Face value per share decreases. This is the correct answer. The face value of a share is the amount that is printed on the face of the share. It is the amount that the company is legally obligated to pay to shareholders if the company is dissolved. When a stock dividend is issued, the number of shares outstanding increases, but the face value of each share remains the same. Therefore, the face value per share decreases.
• D. Market price for share decreases. This is not always true. The market price of a share is determined by supply and demand. When a stock dividend is issued, the number of shares outstanding increases, but the total value of the company remains the same. This can cause the market price per share to decrease, as the total value of the company is now spread over more shares. However, the market price per share may also increase or remain the same, depending on other factors such as the company’s financial performance and the overall stock market conditions.