Gregg is considering the following two courses action:
(1) declaring a 5% stock dividend on the 89,500 $12 par value shares outstanding of
(2) effecting a 2-for-1 stock split that will reduce par value to $6 per share. The current market price is $18 per share.
(Round answers to 0 decimal places, e.g. 20,550).
Complete the tubular summary of the effect of the alternative actions on the company's stockholder equity, outstandin shares.
Before Action After Stock Dividend After Stock Split
B. Retained earnings________________________________________________
Total stockholder's equity ____________________________________________
Outstanding shares______________________________________________--© BrainMass Inc. brainmass.com October 25, 2018, 6:03 am ad1c9bdddf
Solution is provided in a separate Excel file attached.It contains complete data of Owners equity before and after stock dividend and stock split in the table as desired by you. It also contains following additional workings and explanatory notes.
Working for stock dividend
Outstanding shares ...
Stock equity and after stock dividends and after stock splits are examined.
Hinckley Company - Stock dividend, Stock Split
On October 31, the stockholders' equity section of Hinckley Company consists of common stock $800,000 and retained earnings $400,000. Hinckley is considering the following two courses of action: (1) Declare a 10% stock dividend on the 80,000, $10 par value shares out standing, or (2) effect a 2-for-1 stock split that will reduce par value to $5 per share. The current market price is $15 per share.
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.View Full Posting Details