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Smoky Joes, Inc., a rapidly growing chain of BBQ restaurants, has had considerable increases in the value of their common stock over the years. Normally,

Smoky Joes, Inc., a rapidly growing chain of BBQ restaurants, has had considerable increases in the value of their common stock over the years. Normally, the Board of Directors declares a modest cash dividend. But this year, they decided to issue a 50% stock dividend. Your friend, a new investor that saw potential in the company early on, came to you excited about the news, saying that he is getting free stock and that this is much better than the cash dividends from last year. Using what you have learned in accounting thus far, respond to your friends statement including the following points:

  1. What does a 50% stock dividend really mean?
  2. Is your friend really getting free stock?
  3. Which would you prefer, a cash dividend or a stock dividend?

Be sure to post an initial, substantive response by Thursday at 11:59 p.m. MST and respond to 2 or more peers with substantive responses by Sunday at 11:59 p.m. MST. A substantive initial post should be 250-500 words and answers the question presented completely and/or asks a thoughtful question pertaining to the topic. Substantive peer responses ask a thoughtful question pertaining to the topic and/or answer a question (in detail) posted by another student or the instructor.

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