Stock split versus stock dividend-Firm Mammoth Corporation is considering a 3-for-2 stock split. It currently has...

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Stock split versus stock dividend-Firm Mammoth Corporation is considering a 3-for-2 stock split. It currently has the stockholders' equity position shown. The current stock price is $120 per share. The most recent period's earnings available for common stock is included in retained earnings. Preferred stock Common stock (130,000 shares at $5 par) Paid-in capital in excess of par Retained earnings Total stockholders' equity $ 1,000,000 650,000 1,700,000 10,000,000 $13,350,000 a. What effect on Mammoth's equity account would result from the stock split? b. What change in stock price would you expect to result from the stock split? c. What is the maximum cash dividend per share that the firm could pay on common stock before and after the stock split? (Assume that legal capital includes all paid-in capital.) d. Contrast your answers to parts a through c. with the circumstances surrounding a 50% stock dividend. e. Explain the differences between stock splits and stock dividends. a. If the firm declares a 3-for-2 stock split, the new balance in the common stock account after the split is $ 650000 . (Round to the nearest dollar.) The new balance in the paid-in capital in excess of par account after the stock split is $ 1700000. (Round to the nearest dollar.) The new balance in the retained earnings account after the stock split is $ 10000000. (Round to the nearest dollar.) Stock split versus stock dividend-Firm Mammoth Corporation is considering a 3-for-2 stock split. It currently has the stockholders' equity position shown. The current stock price is $120 per share. The most recent period's earnings available for common stock is included in retained earnings. Preferred stock Common stock (130,000 shares at $5 par) Paid-in capital in excess of par Retained earnings Total stockholders' equity $ 1,000,000 650,000 1,700,000 10,000,000 $13,350,000 a. What effect on Mammoth's equity account would result from the stock split? b. What change in stock price would you expect to result from the stock split? c. What is the maximum cash dividend per share that the firm could pay on common stock before and after the stock split? (Assume that legal capital includes all paid-in capital.) d. Contrast your answers to parts a through c. with the circumstances surrounding a 50% stock dividend. e. Explain the differences between stock splits and stock dividends. a. If the firm declares a 3-for-2 stock split, the new balance in the common stock account after the split is $ 650000 . (Round to the nearest dollar.) The new balance in the paid-in capital in excess of par account after the stock split is $ 1700000. (Round to the nearest dollar.) The new balance in the retained earnings account after the stock split is $ 10000000. (Round to the nearest dollar.)

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