Cash versus stock dividendMilwaukee Tool has the following stockholders' equity account. The firm's common stock currently sells for

$3.81

per share.

Preferred stock	$ 91,000
Common stock (400,000 shares at $0.96 par)	384,000
Paid-in capital in excess of par	182,000
Retained earnings	320,000
Total stockholders' equity	$977,000

a. Show the effects on the firm of a cash dividend of $0.05 per share.

b. Show the effects on the firm of a 15% stock dividend.

c.Compare the effects in parts a and b.

What are the significant differences between the two methods of paying dividends?

Question content area bottom

a.The balance in preferred stock after the $0.05 cash dividend is __. (Round to the nearest dollar.)

- The balance in common stock after the $0.05. cash dividend is ___

- The balance in paid-in capital after the $0.05 cash dividend is __

- The balance in retained earnings after the $0.05 cash dividend is __

- Part 5 The balance in total stockholders' equity after the $0.05 cash dividend is __

b.The balance in preferred stock after the 15% stock dividend is

- The balance in common stock after the 15% stock dividend is __

- The balance in paid-in capital after the 15% stock dividend is __

- The balance in retained earnings after the 15% stock dividend is __

- The total stockholder's equity after the 15% stock dividend is __

c.Compare the effects in parts a andb.

What are the significant differences between the two methods of paying dividends?(Select from the drop-down menus.)- __________. (A) Cash dividends B) Stock dividends ). do not affect stockholders' equity; they only redistribute retained earnings into common stock and additional paid-in capital accounts (C) Stock dividends/ D) Cash dividends) _____________. cause a decrease in retained earnings and, hence, in overall stockholders' equity.