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Cullumber Company has had 4 years of record earnings. Due to this success, the market price of its 505,000 shares of $4 par value common
Cullumber Company has had 4 years of record earnings. Due to this success, the market price of its 505,000 shares of $4 par value common stock has increased from $14 per share to $52. During this period, paid-in capital remained the same at $6,060,000. Retained earnings increased from $4,545,000 to $30, 300,000. CEO Don Ames is considering either 1 a 15% stock dividend or 2 a 2-for-1 stock split. He asks you to show e beore-and al ere ects of each option on (a) retained earnings, (b) total stockholders' equity, and (c) par value per share. 1. Stock dividend retained earnings 2. 2-for-1 stock split - retained earnings $ Cullumber Company Original Balance After Dividend After Split Paid-in capital Retained earnings Total stockholder's equity Shares outstanding (ey 1. Stock dividend- par value per share 2. 2-for-1 stock split - par value per share
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