Explore BrainMass

# Stock Dividends

Not what you're looking for? Search our solutions OR ask your own Custom question.

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

Stock Dividends The owner's equity accounts for Hexagon International are shown here:
Common stock (\$1 par value) \$10,000
Capital surplus \$ 180,000
Retained earnings \$ 586,500

Total owner's equity \$ 776,500

a. If Hexagon stock currently sells for \$25 per share and a 10% stock dividend is declared, how many new shares will be distributed? Show how the equity accounts would change.
b. If Hexagon declared a 25% stock dividend, how would the accounts change?

https://brainmass.com/economics/international-economies/stock-dividends-188123

#### Solution Preview

a. If Hexagon stock currently sells for \$25 per share and a 10% stock dividend is declared, how many new shares will be distributed? Show how the equity accounts would change.

The number of shares outstanding are 10,000 (common stock is \$10,000 with \$1 par value so number of shares = 10,000/1=10,000). A 10% stock dividend would mean 10,000X10%=1,000 shares are issued. ...

#### Solution Summary

The solution explains how to calculate the new shares to be issued under stock dividends and the impact on accounts.

\$2.49