In the previous problem, suppose the company instead decides on a two for-one stock split. The firms

Question:

In the previous problem, suppose the company instead decides on a two for-one stock split. The firm’s 42-cent-per-share cash dividend on the new (postsplit) shares represents an increase of 10 percent over last year’s dividend on the presplit stock. What effect does this have on the equity accounts? What was last year’s dividend per share?

Data From Problem 10

The company with the common equity accounts shown here has declared a 10 percent stock dividend at a time when the market value of its stock is $64 per share. What effects on the equity accounts will the distribution of the stock dividend have? Common stock ($1 par value) Capital surplus Retained earnings $ 380,000 1,570,000 3,860,000 Total owners' equity $5,810,

Distribution
The word "distribution" has several meanings in the financial world, most of them pertaining to the payment of assets from a fund, account, or individual security to an investor or beneficiary. Retirement account distributions are among the most... 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...