Wildhorse Co. has had 4 years of record earnings. Due to this success, the market price of
Question:
Wildhorse Co. has had 4 years of record earnings. Due to this success, the market price of its 415,000 shares of S4 par value common stock has Increased from $14 per share to $51. During this penod, paid-in capital remained the same at $4,980,000. Retained earnings increased from $3,735,000 to $24,900,000. 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. (a)
1. Stock dividend ? retained earnings $........
2. 2-for-1 stock split ? Retained earnings $........
(b)
(c)
1. Stock dividend ? par value per share $........
2. 2-for-1 stock split ? par value per share $........
Financial Accounting Tools for business decision making
ISBN: 978-0470534779
6th Edition
Authors: Paul D. Kimmel, Jerry J. Weygandt, Donald E. Kieso