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On October 31, the stockholders' equity section of Bau Company consists of common stock $7,500,000 and retained earnings $1,500,000/ Wade is considering the following two
On October 31, the stockholders' equity section of Bau Company consists of common stock $7,500,000 and retained earnings $1,500,000/ Wade is considering the following two courses of action: (1) declaring a 6% stock dividend on the $15 par value shares outstanding, or (2) effecting a 3-for-1 stock split. The current market price is $18 per share.
Instructions: Prepare a tabular summary of the effects of the alternative actions on the components of stockholders' equity, outstanding shares, and par value per share.
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