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On October 31, the stockholders' equity section of Wildhorse Co.'s balance sheet consists of common stock $660,000 and retained earnings $411,000. Wildhorse is considering
On October 31, the stockholders' equity section of Wildhorse Co.'s balance sheet consists of common stock $660,000 and retained earnings $411,000. Wildhorse is considering the following two courses of action: (1) declaring a 7% stock dividend on the 82,500, $8 par value shares outstanding or (2) effecting a 2-for-1 stock split that will reduce par value to $4 per share. The current market price is $16 per share. Prepare a tabular summary of the effects of the alternative actions on the company's stockholders' equity and outstanding shares. Stockholders' equity Before Action After Stock Dividend Paid-in capital $ Retained earnings Total stockholders' equity $ $ $ Outstanding shares After Stock Split
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