a. Sparks Corporation has 3,000 shares of \(8 \%\), \(\$ 100\) par value preferred stock outstanding at December 31, 2025. At December 31, 2025, the company declared a \(\$ 105,000\) cash dividend. Determine the dividend paid to preferred stockholders and common stockholders under each of the following scenarios.
1. The preferred stock is noncumulative, and the company has not missed any dividends in previous years.
2. The preferred stock is noncumulative, and the company did not pay a dividend in each of the two previous years.
3. The preferred stock is cumulative, and the company did not pay a dividend in each of the two previous years.

b. Spears Company has had 4 years of record earnings. Due to this success, the market price of its 400,000 shares of \(\$ 2\) par value common stock has increased from \(\$ 6\) per share to \(\$ 50\). During this period, paid-in capital remained the same at \(\$ 2,400,000\). Retained earnings increased from \(\$ 1,800,000\) to \(\$ 12,000,000\). CEO Don Ames is considering either (1) a \(15 \%\) stock dividend or (2) a 2 -for-1 stock split. He asks you to show the before-and-after effects of each option on

(a) retained earnings,

(b) total stockholders' equity, and

(c) par value per share.