On October 31, the stockholders' equity section of Omar Company consists of common Compare effects of a stock stock $600,000 and retained earnings $900,000. Omar is considering the following two courses dividend and a stock split.

of action: (1) declaring a 5% stock dividend on the 60.000, $10 par value shares outstanding, or (SO 5)

(2) effecting a 2-for-l slock split that will reduce par value to $5 per share. The current market price is $14 per share.

Instructions Prepare a tabular summary of the effects of the alternative actions on the components of stockholders*
equity, outstanding shares, and book value per share. Use the following column headings:
Before Action. After Stock Dividend, and After Stock Split.