Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Penny Worth Inc. is considering one of the three following courses of action: (1) paying a $0.5 cash dividend, (2) distributing a 6% stock dividend,

image text in transcribed

image text in transcribed

Penny Worth Inc. is considering one of the three following courses of action: (1) paying a $0.5 cash dividend, (2) distributing a 6% stock dividend, or (3) effecting a 2-for-1 stock split. The current share price is $13 per share. Help Penny Worth make its decision by completing the following chart (treat each possibility independently): Before Action After Cash Dividend After Stock Dividend Total assets $1,153,000 $ $ TA $ Total liabilities $253,000 $ $ $ Shareholders' equity Common shares 633,000 Retained earnings 267.000 Total shareholders' equity 900.000 Total liabilities and shareholders' equity $1,153,000 $ $ $ Number of common shares 100,000 Penny Worth Inc. is considering one of the three following courses of action: (1) paying a $0.5 cash dividend. (2) distributing a 6% stock dividend, or (3) effecting a 2-for-1 stock split. The current share price is $13 per share. Help Penny Worth make its decision by completing the following chart (treat each possibility independently): Before Action After Cash Dividend After Stock Dividend After Stock Split $1.153.000 $ $ $ $253.000 $ $ $ 633,000 267.000 I ty 900,000 holders' equity $1,153,000 $ $ $ es 100,000

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Using QuickBooks Accountant 2018 For Accounting

Authors: Glenn Owen

16th Edition

0357042085, 9780357042083

More Books

Students also viewed these Accounting questions

Question

Why is a social network important for a small business?

Answered: 1 week ago