Laine Inc. is considering one of three following courses of action:

(1) Paying a $0.50 cash dividend,

(2) Distributing a 5% stock dividend,

(3) Effecting a 2-for-1 stock split. The current share price is $14 per share.

Instructions

Help Laine make its decision by completing the following chart (treat each possibility independently):

Transcribed Image Text:

After Cash After Stock After Before Action Dividend Dvidend Stock Splt Total assets Total liabilitles Shareholders equity $1,250,000 $ 250,000 Common shares Retained earnings 600,000 400,000 1,000,000 Total shareholders equity Total liabılitles and shareholders equity$1,250,000 Number of common shares 100,000