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Cash versus stock dividend Milwaukee Tool has the following stockholders' equity account. The firm's common stock currently sells for $3.77 per share. Preferred stock Common
Cash versus stock dividend Milwaukee Tool has the following stockholders' equity account. The firm's common stock currently sells for $3.77 per share. Preferred stock Common stock (400,000 shares at $0.99 par) Paid-in capital in excess of par Retained earnings Total stockholders' equity $ 93,000 396,000 194,000 360,000 $1,043,000 a. Show the effects on the firm of a cash dividend of $0.01 per share. b. Show the effects on the firm of a 10% stock dividend. c. Compare the effects in parts a and b. What are the significant differences between the two methods of paying dividends? a. The balance in preferred stock after the $0.01 cash dividend is $ (Round to the nearest dollar.)
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