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On October 31, the stockholders equity section of Pele Companys balance sheet consists of common stock $500,400 and retained earnings $412,300. Pele is considering the
On October 31, the stockholders equity section of Pele Companys balance sheet consists of common stock $500,400 and retained earnings $412,300. Pele is considering the following two courses of action:
(1) | Declaring a 7% stock dividend on the 83,400 $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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