Ace Products sells marked playing cards to blackjack dealers. It has not paid a dividend in many years, but is currently contemplating some kind of dividend.

The capital accounts for the firm are as follows:

Common stock (2,100,000 shares at $5 par)	$ 10,500,000
Capital in excess of par*	3,000,000
Retained earnings	26,500,000
Net worth	$ 40,000,000

*The increase in capital in excess of par as a result of a stock dividend is equal to the new shares created times (Market price Par value).

The companys stock is selling for $20 per share. The company had total earnings of $4,200,000 during the year. With 2,100,000 shares outstanding, earnings per share were $2. The firm has a P/E ratio of 10.

a. What adjustments would have to be made to the capital accounts for a 10 percent stock dividend? Show the new capital accounts.

Note: Do not round intermediate calculations. Input your answers in dollars, not millions (e.g. $1,230,000).

b. What adjustments would be made to EPS and the stock price? (Assume the P/E ratio remains constant.)

Note: Do not round intermediate calculations and round your answers to 2 decimal places.

c. How many shares would an investor end up with if he or she originally had 130 shares?

Note: Do not round intermediate calculations and round your answer to the nearest whole share.

d. What is the investor's total investment worth before and after the stock dividend if the P/E ratio remains constant?

Note: Do not round intermediate calculations and round your answers to the nearest whole dollar.