P$1413$ CASH VERSUS STOCK DIVIDEND Milwaukee Tool has the following stockholders$$ equity account. The firm$$s common stock currently sells for $$4$ per share.

Preferred stock $$100,000$

Common stock $(400,000$ shares at $$1$ par$)400,000$

Paid$-$in capital in excess of par $200,000$

Retained earnings $320,000$

$$Total stockholders$$ equity $$1,020,000$

Show the effects on the firm of a cash dividend of $$0\mathrm{.}01,$ $$0\mathrm{.}05,$ $$0\mathrm{.}10,$ and $$0\mathrm{.}20$ per share.

Show the effects on the firm of a $1\%,5\%,10\%,$ and $20\%$ stock dividend.

Compare the effects in parts a and b$.$ What are the significant differences between the two methods of paying dividends?