The owners' equity accounts for Hexagon International are shown here: Common stock ($1 par value)...............$ 40,000 Capital

Question:

The owners' equity accounts for Hexagon International are shown here:

Common stock ($1 par value)...............$ 40,000

Capital surplus.................................155,000

Retained earnings..............................538,400

Total owners' equity........................$733,400

a. If the company's stock currently sells for $39 per share and a 10 percent stock dividend is declared, how many new shares will be distributed? Show how the equity accounts would change.

b. If the company declared a 25 percent stock dividend, how would the accounts change?

Dividend
A dividend is a distribution of a portion of company’s earnings, decided and managed by the company’s board of directors, and paid to the shareholders. Dividends are given on the shares. It is a token reward paid to the shareholders for their...