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Jan Brady, chief accountant of Mulberry Silk Products, is trying to work out the feasibility of a 20% stock dividend. The equity section of the

Jan Brady, chief accountant of Mulberry Silk Products, is trying to work out the feasibility of a 20% stock dividend. The equity section of the balance sheet follows:

Common Stock (2 Million shares, $1 Par) 2000 Capital in Excess of Par 8,000 Retained Earnings 10,000 Total Common Equity 20,000

The current market price of the company's stock is $31 per share. Is it possible to pay a 20% stock dividend? Is it possible to pay a 10% stock dividend? Explain?

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