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Question 8 of 20 - / 8 III Current Attempt in Progress On October 31, Lynch Corporation's liabilities totalled $185,000. Its shareholders' equity consisted of
Question 8 of 20 - / 8 III Current Attempt in Progress On October 31, Lynch Corporation's liabilities totalled $185,000. Its shareholders' equity consisted of 80,000 common shares issued for $800,000 and retained earnings, $229,000. Lynch is considering the following three courses of action: (1) paying a $0.65 cash dividend, (2) declaring a 10% stock dividend, or (3) effecting a 3-for-1 stock split. The current market price of Lynch's common shares is $15 per share. Complete the following tabular summary of the effects of the alternative actions on Lynch's shareholders' equity and number of shares. Before Action (1) After Cash Dividend (2) After Stock Dividend (3) After Stock Split Total assets $1,214,000 $ Total liabilities $185.000 $ $ Common shares 800,000 Retained earnings 229,000 Total shareholders' equity 1,029,000 Total liabilities and shareholders' equity $1,214,000 $ $ $ Number of common shares 80,000
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