Question
Milwaukee Tool has the following stockholders' equity account. The firm's common stock currently sells for $2.52 per share. Preferred stock $ 99,000 Common stock
Milwaukee Tool has the following stockholders' equity account. The firm's common stock currently sells for $2.52 per share. Preferred stock $ 99,000 Common stock (400,000 shares at $1.02 par) 408,000 Paid-in capital in excess of par 183,000 350,000 Retained earnings Total stockholders' equity $1,040,000 a. Show the effects on the firm of a cash dividend of $0.10 per share. b. Show the effects on the firm of a 1% stock dividend. c. Compare the effects in parts a and b. What are the significant differences between the two methods of paying dividends? (Round to the nearest dollar.) (Round to the nearest dollar.) a. The balance in preferred stock after the $0.10 cash dividend is The balance in common stock after the $0.10 cash dividend is $ The balance in paid-in capital after the $0.10 cash dividend is $ The balance in retained earnings after the $0.10 cash dividend is $. (Round to the nearest dollar.) The balance in total stockholders' equity after the $0.10 cash dividend is $ (Round to the nearest dollar.) b. The balance in preferred stock after the 1% stock dividend is $ (Round to the nearest dollar.) (Round to the nearest dollar.) (Round to the nearest dollar.) The balance in paid-in capital after the 1% stock dividend is $. The balance in retained earnings after the 1% stock dividend is $. (Round to the nearest dollar.) (Round to the nearest dollar.). The total stockholder's equity after the 1% stock dividend is $ c. Compare the effects in parts a and b. What are the significant differences between the two methods of paying dividends? (Select from the drop-down menus.) The balance in common stock after the 1% stock dividend is $ (Round to the nearest dollar.)
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