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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). Total assets Before Action (1) After Cash Dividend $1,360,000 $ Total liabilities $425,000 $ Stockholders' equity Common stock 625,000 Retained earnings 310,000 Total stockholders' equity 935,000 Total liabilities and stockholders' equity $1,360,000 Number of common shares 125,000 (2) After Stock Dividend $ +A +A +A $ $ Afte A
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