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Clinton Inc. is considering one of the three following courses of action: (1) paying a $0.40 cash dividend, (2) distributing a 6% stock dividend, or
Clinton Inc. is considering one of the three following courses of action: (1) paying a $0.40 cash dividend, (2) distributing a 6% stock dividend, or (3) effecting a 2-for-1 stock split. The current share price is $13 per share. Help Clinton make its decision by completing the following chart (treat each possibility independently):
After Cash Dividend After Stock Dividend After Stock Split Before Action Total assets $1,372,000 $ Total liabilities $266,000 Shareholders' equity Common shares 645,000 Retained earnings 461,000 Total shareholders' equity 1,106,000 Total liabilities and shareholders' equity $1,372,000 $ $ $ Number of common shares 100,000
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