In the previous problem, suppose the company instead decides on a two-for-one stock split. The firms 72-cent-per-share

Question:

In the previous problem, suppose the company instead decides on a two-for-one stock split. The firm’s 72-cent-per-share cash dividend on the new (post split) shares represents an increase of 10 percent over last year’s dividend on the presplit stock. What effect does this have on the equity accounts? What was last year’s dividend per share?

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...