3. A company whose stock is selling for $60 has the following balance sheet:

Assets = $30,000,000

Liabilities = $14,000,000

Preferred Stock = 1,000,000

Common stock ($12 par; 100,000 shares outstanding) = 1,200,000

Paid-in Capital = 1,800,000

Retained earnings = 12,000,000

a) Construct a new balance sheet showing the effects of a 3-for-1 stock split. What is the new price of the stock?

b) Construct a new balance sheet showing the effects of a 10 percent stock dividend. What will be the approximate new price of the stock?