Problem 18-18 Stock dividend and its effect [LO18-4 Ace Products sells marked playing cards to blackjack dealers. It has not paid a dividend in many years, but Is currently contemplating some kind of dividend The capital accounts for the firm are as follows: Common stock (2,560, aga shares at $1par) Capital in excess of par Retained earnings Net worth $25, ceeaaa 5, cee, aaa 555, cee, aaa "The Increase in capital in excess of par ss a result of a stock dividend is equal to the new shares created times Market price - Par value The company's stocks selling for $30 per share. The company has total earnings of $7,800,000 during the year. With 2600,000 shares outstanding, earnings per share vere $3. The firm has a PE rstio of 10 .. Whst sdjustments would have to be made to the capital accounts for a 10 percent stock dividend? Show the new capital accounts. (Do not round Intermediate calculations. Input your answers in dollars, not millions (e.g. $1,230,000).) Common Capital catal Retsidige Netwo b. What djustments would be made to EPS and the stock price? (Assume the PE rsto remains constant) (Do not round Intermediate calculations and round your answers to 2 decimal places.) EPS Stock c. How many shares would an Investor end up with if he or she originally had 120 shares? (Do not round Intermediate calculations and round your answer to the nearest whole share.) Number of d. What is the investor's totainvestment worth before and after the stock dividend if the P/E ratio remains constant (Do not round Intermediate calculations and round your answers to the nearest whole dollar.) Tural Before stock card Ack dividend