Purchase Solution

# Stock Dividend

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The owners' equity accounts for a company are shown here:

Common stock (\$1 par value) \$ 10,000
Capital surplus 194,000
Retained earnings 633,000
======
Total owners' equity \$837,000

a. If a companys stock currently sells for \$29/ share and a 9% stock dividend is declared, _____new shares will be distributed. Show how the equity accounts change:
Common stock (\$1 par value) \$ ______
Capital surplus ______
Retained earnings ______
=====
Total owners' equity \$ _______

b. If Hexagon declared a 28%stock dividend,______ new shares will be distributed. Show how the equity accounts would change:

Common stock (\$1 par value) \$ ______
Capital surplus ______
Retained earnings _______
========
Total owners' equity \$ _______

*(all answers rounded to the nearest dollar)
this is what i have so far, can you please assist from here:

29 x 10,000=290,000 total market value of equity
with a 9% dividend each person will recieve 1 additional share for each 9 owned.
and the new total of shares outstanding is now 11,000

for the same problem with these numbers:

Common stock (\$1 par value) \$ 9,000
Capital surplus 169,000
Retained earnings 551,000
======
Total owners' equity \$729,000

a. stock currently sells for \$28/share and a 12% stock dividend is declared, ____ new shares will be distributed. Show how the equity accounts would change:

Common stock (\$1 par value) \$______
Capital surplus ______
Retained earnings ______
======
Total owners' equity \$ _____

b. If Hexagon declared a 29% stock dividend,____new shares will be distributed. Show how the equity accounts would change:

Common stock (\$1 par value) \$ ______
Capital surplus ______
Retained earnings ______
======
Total owners' equity \$ ______

##### Solution Summary

The solution explains the impact of a stock dividend on the stockholders equity accounts of a company

##### Solution Preview

The owners' equity accounts for a company are shown here:

Common stock (\$1 par value) \$ 10,000
Capital surplus 194,000
Retained earnings 633,000
======
Total owners' equity \$837,000

a. If a companys stock currently sells for \$29/ share and a 9% stock dividend is declared, _____new shares will be distributed. Show how the equity accounts change:
Common stock (\$1 par value) \$ ______
Capital surplus ______
Retained earnings ______
=====
Total owners' equity \$ _______

The stock dividend are absed on the total shares outstanding. There are 10,000 shares. A 9% stock dividend ...

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