King Corporation is authorized to issue an unlimited number of no par value common shares, and has 200 000 common shares outstanding. The business has the following balances in its shareholders' equity accounts:

Question 1 (10 points) Saved King Corporation is authorized to issue an unlimited number of no par value common shares, and has 200 000 common shares outstanding. The business has the following balances in its shareholders' equity accounts: King Corporation Shareholders' Equity Common Shares $900 000 Retained Earnings 350 000 Total Equity $1 250 000 As you can see, the company has enough in its Retained Earnings account to declare a dividend. The board of directors has decided to either pay a $1.50 per share cash dividend or issue one share for every four shares each shareholder owns. The current market price is $6 per share. Cash Dividend Stock Dividend a e King Corporation Shareholders' Before Equity Dividend Common Shares $900 000 Retained Earnings 350 000 Total Equity $1 250 000 Book Value per share (Equity/# $6.25 shares) b f d h h Required: 1. Determine the values of a-h. Where applicable, show your calculations to earn full marks. (10 TI marks) 2. What effect does issuing a Cash Dividend have on total shareholders' equity? Support your answer using figures from the above table. (2C marks) 3. What effect does issuing a Stock Dividend have on total shareholders' equity? Support your answer using figures from the above table. (2C marks) 4. Assume that you own 800 shares in King Corporation. a) Calculate the dividend you would receive from a cash dividend. (1C mark) b) Calculate the dividend you would receive from a stock dividend. (1C mark) c) As a shareholder, which would you prefer? Explain in detail and support your answer using figures from the above table. (4C marks)