Milwaukee Tool has the following stockholders' equity account. The firm's common stock currently sells for

$3.96 per share.

(Round to the nearest dollar; show steps/work)

Preferred stock	$90,000
Common stock (100,000 shares at $0.99 par)	99,000
Paid-in capital in excess of par	198,000
Retained earnings	380,000
Total stockholders' equity	$767,000

a. Show the effects on the firm of a cash dividend of $0.20 per share.

b. Show the effects on the firm of a 15% stock dividend.

c.Compare the effects in parts a and b. What are the significant differences between the two methods of paying dividends?