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Cullumber Inc. is considering one of the three following courses of action: (1) paying a $0.50 cash dividend, (2) distributing a 5% dividend, or
Cullumber Inc. is considering one of the three following courses of action: (1) paying a $0.50 cash dividend, (2) distributing a 5% dividend, or (3) effecting a 2-for-1 stock split. The current share price is $14 per share. Help Cullumber make its decision by completing the following table (treat each possibility independently). Before Action Total assets $1,255,000 $ Total liabilities $269,000 $ +A Common stock Retained earnings Total stockholders' equity 589,000 397,000 986,000 Total liabilities and stockholders' equity $1,255,000 Number of common shares 98,000 EA $ (1) After Cash Dividend $1,225,000 $269,000 $589,000 $348,000 $937,000 $1,206,000 98,000 GA +A $ +A (2) After Stoc Dividend $:
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