Milwaukee Tool has the following stockholders' equity account. The firm's common stock currently sells for $3.11per share:

a. Show the effects on the firm of a cash dividend of

$0.200.20

per share.

b. Show the effects on the firm of a 55% stock dividend.

c.Compare the effects in parts a and

b. What are the significant differences between the two methods of paying dividends?

a.The balance in preferred stock after the $0.20 cash dividend is $______

(Round to the nearest dollar.)

Preferred stock	$ 91 comma 00091,000
Common stock (400 comma 000400,000 shares at $0.910.91 par)	364 comma 000364,000
Paid-in capital in excess of par	213 comma 000213,000
Retained earnings	Modifying 390 comma 000 with underline 390,000
Total stockholders' equity	Modifying $ 1 comma 058 comma 000 with double underline$1,058,000