Question

Sammy’s Sportshops has been very profitable in recent years and has seen its stock price steadily increase to over $100 per share. The CFO thinks the company should consider either a 100% stock dividend or a 2-for-1 stock split.

Required:
1. Complete the following chart comparing the effects of a 100% stock dividend versus a 2-for-1 stock split on the stockholders’ equity accounts, shares outstanding, par value, and share price.


2. What is the primary reason companies declare a large stock dividend or a stocksplit?


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  • CreatedJuly 15, 2014
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