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Beca Inc. is considering one of the three following courses of action: (1) paying a $0.5 cash dividend, (2) distributing a 4% stock dividend,
Beca Inc. is considering one of the three following courses of action: (1) paying a $0.5 cash dividend, (2) distributing a 4% stock dividend, or (3) effecting a 2-for-1 stock split. The current share price is $14 per share. Help Beca make its decision by completing the following chart (treat each possibility independently): Before After Cash After Stock Action Dividend Dividend Total assets $1,136,000 1,086,000 $ 1,136,000 $ Total liabilities $255,000 $ 255,000 255,000 $ Shareholders' equity Common shares 598,000 598,000 668,000 Retained earnings 283,000 233,000 Total shareholders' equity 881,000 Total liabilities and shareholders' equity $1,136,000 $ Number of common shares 100,000 %24 %24 %24 %24 %24 %24 %24 Before After Cash After Stock After Action Dividend Dividend Stock Split $1,136,000 $ 1,086,000 $ 1,136,000 1,136,000 $255,000 $ 255,000 $ 255,000 255,000 598,000 598,000 668,000 598,000 283,000 233,00d 881,000 equity $1,136,000 $ $ $ 100,000 %24 %24 %24 %24 %24
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