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Cullumber Inc. is considering one of three options: (1) paying a $0.47 cash dividend. (2) distributing a 4% stock dividend, or (3) effecting a 3-for-1
Cullumber Inc. is considering one of three options: (1) paying a $0.47 cash dividend. (2) distributing a 4% stock dividend, or (3) effecting a 3-for-1 stock split. The current fair value is $15 per share. Help Cullumber decide what to do by completing the following chart (treat each possibility independently): Before Action After Cash Dividend After Stock Dividend After Stock Split Total assets $1,883,000 $ $ $ Total liabilities $81,000 $ $ Common shares 1.176,000 Retained earnings 626,000 1,802,000 Total shareholders equity Total liabilities and shareholders equity $1,883,000 $ $ Number of common shares 56,000
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