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Carla Vista Inc. is considering one of the three following courses of action: (1) paying a $0.60 cash dividend, (2) distributing a 4% dividend,
Carla Vista Inc. is considering one of the three following courses of action: (1) paying a $0.60 cash dividend, (2) distributing a 4% dividend, or (3) effecting a 2-for-1 stock split. The current share price is $15 per share. Help Carla Vista make its decision by completing the following table (treat each possibility independently). Before Action (1) (2) After Cash Dividend After Stock Dividend $1,360,000 $ 1285000 1360000 $ (3) After Stock Split 1360000 425000 $ 425000 $ 425000 $425,000 uity 625,000 625000 ngs 700000 625000 310,000 235000 235000 310000 rs' equity 935,000 860000 935000 935000 nd stockholders' equity $1,360,000 1285000 $ 1360000 1360000 non shares 125,000 125000 125000 250000
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