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:

$*$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 company's stock is selling for $$10$ per share. The company had total earnings of $$3,000,000$ during the year. With

$3,000,000$ shares outstanding, earnings per share were $$1.$ 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 $140$ shares?

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

Number of shares

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.