Cash versus stock dividend Milwaukee Tool has the following stockholders' equity account. The firm's common stock currently sells for $3.57 per share.

Preferred stock	$ 94,000
Common stock (400,000 shares at $1.01 par)	404,000
Paid-in capital in excess of par	214,000
Retained earnings	330000
Total stockholders' equity	$1,042,000

A. Show the effects on the firm of a cash dividend of

$05 per share.

b. Show the effects on the firm of a 55% stock dividend.

c. Compare the effects in parts a and b. What are the significant differences between the two methods of paying dividends?