Explore BrainMass

# Omar Company

This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

E12-10 On October 31, the stockholders' equity section of Omar Company consists of common stock \$600, 000 and retained earnings \$900, 000. Omar is considering the following two courses of action: (1) declaring a 5% stock dividend on the 60, 000, \$10 par value shares outstanding, or (2) effecting a 2-for-1 stock split that will reduce par value to \$5 per share. The current market price is \$14 per share. Instructions Prepare a tabular summary of the effects of the alternative actions on the components of stockholders' equity, outstanding shares, and book value per share. Use the following column headings: Before Action, After Stock Dividend, and After Stock Split.

See attached file for full problem description.

© BrainMass Inc. brainmass.com June 3, 2020, 7:20 pm ad1c9bdddf
https://brainmass.com/business/business-math/omar-company-94473

#### Solution Preview

E12-10 On October 31, the stockholders' equity section of Omar Company consists of common stock \$600, 000 and retained earnings \$900, 000. Omar is considering the following two courses of action: (1) declaring a 5% stock dividend on the 60, 000, \$10 par value shares outstanding, or (2) effecting a 2-for-1 stock split that will reduce par value to \$5 per share. The current market price is \$14 per share. Instructions Prepare ...

#### Solution Summary

This solution is comprised of a detailed explanation to answer the request of the assignment in excel file.

\$2.19