10. The Addington Book Company has the following equity position. The stock is currently selling for $3 per share.

Common stock (8 million shares outstanding, $2 par) .......... $16,000,000 Paid in excess ............................................................................ 4,000,000 Retained earnings...................................................................... 12,000,000 Total common equity ................................................................ $32,000,000 Book value per share................................................................. $ 4.00

a. What was the average price at which the company originally sold its stock?

b. Reconstruct the equity statement above to reflect a four-for-one stock split.

c. Reconstruct the statement to reflect a 12.5% stock dividend.