The following note related to stockholders' equity was reported in Wiebold, Inc.'s annual report.

On February 1, the Board of Directors declared a 3-for-2 stock split, distributed on February 22 to shareholders of record on February 10. Accordingly, all numbers of common shares, except unissued shares and treasury shares, and all per share data have been restated to reflect this stock split.

On the basis of amounts declared and paid, the annualized quarterly dividends per share were $0.80 in the current year and $0.75 in the prior year.

Instructions

(a)   What is the significance of the date of record and the date of distribution?

(b)   Why might Wiebold have declared a 3-for-2 for stock split?

(c)   What impact does Wiebold's stock split have on (1) total stockholders' equity, (2) total par value, (3) outstanding shares, and (4) book value per share?

d) Why is it beneficial for companies to do stock splits to lower the price per share?

Answer rating: 100% (QA)

Solution a What is the significance of the date of record and the date of distribution Ans a The date of record is the day on which the company checks its records to identify shareholders of the compa... View the full answer