Jurgens AG has had 4 years of net income. Due to this success, the market price of

Question:

Jurgens AG has had 4 years of net income. Due to this success, the market price of its 400,000 shares of £2 par value ordinary shares has increased from £12 per share to £49. During this period, total share capital and share premium remained the same at £2,400,000. Retained earnings increased from £1,800,000 to £12,000,000. CEO E. Rife is considering either a 15% share dividend or a 2-for-1 share split. He asks you to show the before-and after effects of each option on (a) retained earnings and (b) total equity.

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... Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...

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