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On October 31, the stockholders equity section of Pele Companys balance sheet consists of common stock $504,600 and retained earnings $414,100. Pele is considering the
On October 31, the stockholders equity section of Pele Companys balance sheet consists of common stock $504,600 and retained earnings $414,100. Pele is considering the following two courses of action: (1) Declaring a 6% stock dividend on the 84,100 $6 par value shares outstanding (2) Effecting a 2-for-1 stock split that will reduce par value to $3 per share. The current market price is $17 per share. Prepare a tabular summary of the effects of the alternative actions on the companys stockholders equity and outstanding shares.
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