Question: Question c drop downs are cash dividends and stock dividends. Shown on the bottom right corner Cash versus stock dividend Milwaukee Tool has the following

 Question c drop downs are cash dividends and stock dividends. Shown

on the bottom right corner Cash versus stock dividend Milwaukee Tool has

Question c drop downs are cash dividends and stock dividends. Shown on the bottom right corner

Cash versus stock dividend Milwaukee Tool has the following stockholders' equity account. The firm's common stock currently sells for $2.64 per share. Preferred stock $ 96,000 Common stock (200.000 shares at $0.99 par) 198.000 Paid-in capital in excess of par 183.000 Retained earnings 380.000 Total stockholders' equity $857.000 a. Show the effects on the form of a cash dividend of 0.01 per share. b. Show the effects on the firm of a 5% stock dividend. c. Compare the effects in parts a and b. What are the significant differences between the two methods of paying dividends? a. The balance in preferred stock after the S0.01 cash dividend is $(Round to the nearest dollar) The balance in common stock after the 50.01 cash dividend is $. (Round to the nearest dollar.) The balance in paid-in capital after the $0.01 cash dividend is S (Round to the nearest dollar.) The balance in retained earnings after the S0.01 cash dividend is S (Round to the nearest dollar.) The balance in total stockholders' equity after the $0.01 cash dividend is s. (Round to the nearest dolar.) b. The balance in preferred stock after the 5% stock dividend is $. (Round to the nearest dollar.) The balance in common stock after the 5% stock dividend is $ (Round to the nearest dollar.) The balance in paid-in capital after the 5% stock dividend is $. (Round to the nearest dollar.) The balance in retained earnings after the 5% stock dividend is $ (Round to the nearest dollar.) b. The balance in preferred stock after the 5% stock dividend is s (Round to the nearest dollar.) The balance in common stock after the 5% stock dividend is $ (Round to the nearest dollar.) The balance in paid-in capital after the 5% stock dividend is {Round to the nearest dollar.) The balance in retained earnings after the 5% stock dividend is $. (Round to the nearest dollar.) The total stockholder's equity after the 5% stock dividend is $ (Round to the nearest dollar.) 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.) do not affect stockholders' equity; they only redistribute retained earnings into common stock and additional paid-in capital accounts. earnings and, hence, in overall stockholders' equity. Cash dividends Enter your answer in each of the answer boxes cause a decrease in retained Stock dividends

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer
Step: 1 Unlock blur-text-image
Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock
Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!