Stock Splits in the previous problem, suppose the company instead decides on a five-for-one stock split. The

Question:

Stock Splits in the previous problem, suppose the company instead decides on a five-for-one stock split. The firm’s 90-cent per share cash dividend on the new (post split) shares represents and 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...