a. Show the effect on the equity accounts and per-share data of a 20% stock dividend. The number of shares of common stock after the dividend is shares. (Round to the nearest whole number.) The balance in the common stock account after the dividend is $. (Round to the nearest dollar.) (Round to the nearest dollar.) The balance in the paid-in capital in excess of par account after the dividend is $ The balance in the retained earnings account after the dividend is $ (Round to the nearest dollar.)
a. Show the effect on the equity accounts and per-share data of a 20% stock dividend. The number of shares of common stock after the dividend is shares. (Round to the nearest whole number.) The balance in the common stock account after the dividend is $. (Round to the nearest dollar.) (Round to the nearest dollar.) The balance in the paid-in capital in excess of par account after the dividend is $ The balance in the retained earnings account after the dividend is $ (Round to the nearest dollar.)
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
Transcribed Image Text:of sha
ck split-
share to a
Data Table
ea 2
split. At th
quity accou
quity accou
plish Wicke
ight encou
Preferred Stock
Common Stock (300,000 shares at $1 par)
Paid-in capital in excess of par
Retained Earnings
300,000
800,000
2,160,000
quity accou
Total Stockholders' equity
$3,260,000
mmon stod
$31
Price per share
Earnings per share
Dividend per share
$3.60
$1.39
stock acco
capital in ex
Print
Done
Tearnings a
er(s).
Transcribed Image Text:Home
Stock dividend versus stock split-Firm The board of Wicker Home Health Care, Inc., is exploring ways to expand the number of shares outstanding in an effort to
reduce the market price per share to a level that the firm considers more appealing to investors. The options under consideration are a 20% stock dividend and,
se Options alternatively, a 5-for-4 stock split. At the present time, the firm's equity account and other per-share information are given as follows:
a. Show the effect on the equity accounts and per-share data of a 20% stock dividend.
b. Show the effect on the equity accounts and per-share data of a 5-for-4 stock split.
c. Which option will accomplish Wicker's goal of reducing the current stock price while maintaining a stable level of retained earnings?
d. What legal constraints might encourage the firm to choose a stock split over a stock dividend?
ar
a. Show the effect on the equity accounts and per-share data of a 20% stock dividend.
shares. (Round to the nearest whole number.)
The number of shares of common stock after the dividend is
(Round to the nearest dollar.)
The balance in the common stock account after the dividend is $
(Round to the nearest dollar.)
The balance in the paid-in capital in excess of par account after the dividend is $
(Round to the nearest dollar.)
The balance in the retained earnings account after the dividend is $
Click to select your answer(s).
P Type here to search
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps with 2 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, finance and related others by exploring similar questions and additional content below.Recommended textbooks for you
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Essentials Of Investments
Finance
ISBN:
9781260013924
Author:
Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:
Mcgraw-hill Education,
Foundations Of Finance
Finance
ISBN:
9780134897264
Author:
KEOWN, Arthur J., Martin, John D., PETTY, J. William
Publisher:
Pearson,
Fundamentals of Financial Management (MindTap Cou…
Finance
ISBN:
9781337395250
Author:
Eugene F. Brigham, Joel F. Houston
Publisher:
Cengage Learning
Corporate Finance (The Mcgraw-hill/Irwin Series i…
Finance
ISBN:
9780077861759
Author:
Stephen A. Ross Franco Modigliani Professor of Financial Economics Professor, Randolph W Westerfield Robert R. Dockson Deans Chair in Bus. Admin., Jeffrey Jaffe, Bradford D Jordan Professor
Publisher:
McGraw-Hill Education