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Dividend constraints The Howe Company's stockholders' equity account is as follows: E: The earnings available for common stockholders from this period's operations are $100,000, which have been included as part of the $2.2 million retained earnings. a. What is the maximum dividend per share that the firm can pay? (Assume that legal capital includes all paid-in capital.) b. If the firm has $160,000 in cash, what is the largest per-share dividend it can pay without borrowing? c. Indicate the accounts and changes, if any, that will result if the firm pays the dividends indicated in parts a and b. d. Indicate the effects of an $80,000 cash dividend on stockholders' equity. a. The maximum dividend per share that the firm can is $. (Round to the nearest cent.) b. If the firm has $160,000 in cash, the largest per-share dividend it can pay without borrowing is $. (Round to the nearest cent.) c. If the firm pays the dividends indicated in part a, cash will decrease by $ (Round to the nearest dollar.) Data Table If the firm pays the dividends indicated in part a, retained earnings will decrease by $ (Round to the nearest dollar.) Common stock (500,000 shares at $6 par) Paid-in capital in excess of par Retained earnings Total stockholders' equity $3,000,000 2,000,000 2,200,000 $7,200,000 If the firm pays the dividends indicated in part b, cash will decrease by $ (Round to the nearest dollar.) If the firm pays the dividends indicated in part b, retained earnings will decrease by $. (Round to the nearest dollar.) d. An $80,000 cash dividend will cause retained earnings will decrease by $. (Round to the nearest dollar.) Stockholders' equity will decrease by $80,000 to $ . (Round to the nearest dollar.) Print Done