ABC Corp. has 675,000 shares of $1 par value common stock. The current market price is $100.
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Question:
ABC Corp. has 675,000 shares of $1 par value common stock. The current market price is $100. The CEO of the company is considering either a $1 per share cash dividend, or 12% stock dividend, or a 2-for-1 stock split. Calculate the impact on the items of stockholders' equity for each alternative option in the following table.
Option 1 | Option 2 | Option 3 | ||
Original Balances | If 2-for-1 stock split | After $1 per share cash dividend | If 12% stock dividend paid | |
Paid-in capital | $4,500,000.00 | |||
Retained earnings | $10,000,000.00 | |||
Total stockholders' equity | $14,500,000.00 | |||
Outstanding shares | $675,000 | |||
Par value per share | $1.0 | |||
Market value per share | $100 | |||
Total Market value of equity | $67,500,000.00 |
Expert Answer:
Solution Option 1 Original Balances If 2for1 stock split Option 2 After 1 per share cash dividend ... View the full answer
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