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) Jurgens AG has had 4 years of net income. Due to this success, the mar- ket price of its 400,000 shares of 2 par
) Jurgens AG has had 4 years of net income. Due to this success, the mar- ket price of its 400,000 shares of 2 par value ordinary shares has increased from 12 per share to 49. During this period, total share capital and share premium remained the same at
2,400,000. Retained earnings increased from 1,800,000 to 12,000,000. CEO E. Rife is consid- ering either a 15% share dividend or a 2-for-1 share split. He asks you to show the before-and- after eects of each option on (a) retained earnings and (b) total equity
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