Stock dividend versus stock apit - Firm The bowrd of Wicker Home Heath Cave, inc, is exploring ways to expand the number of shares outstanding in an effor to reduce the morket price per share to a level that the fim considers more oppealing so investors. The opbons under convideration are a 2015 stock divideod and, allornatively, a 5 -foe-4 stock spilt. At the prestent time, the firnis equity account and other per-share information are givon as folows a. Srow the eflect on the equity accounts and por shave data of a 20% Hock dividend. b. Show the effect on the equily accounts and pwestare data of a S-for-4 atock spie. e. Which option will accomplish wicker's goal of tedueing the cournent stock price while maintaining a stable level of retained oarnings? d. What legal constrants might encourage the firm to choose a stock spit over a stock dividenu? a. Show the effect en the equity ascounts and perishare data of a 20% ateck bilidend The number of shares of common sock aher the dividend is shares. (Round to the nearest whob number) The balance in the common stock account after the dividend is 1 (Round to the newest dollar.) The bsiance in the paidin capial in excess of par account after the divdend isi (Round to the newbet dolar) The bilence in the relained earrings account afer Bhe dividend is 1 ( (Hound is the nearest dolar.) The pres per share of comnon stock aner the didend is 1 (Round to bie nearest cent) The earnings per share (e.P5) atter the dvidend is 3 (Forved to the nearest cent) b. Show the stloct on the equity accounts and per-thave datu of a S.tor-4 stock spat. The number of ahares of common stock affer the sple is shares. (Roond so the nearest whola number) The bolance in the common stock acobint after the spition (Round is the nearest dollor) The balance in the paifin capital in excess of par account anter the splt is s (Round to the nearest doilar) The bolance in the retained eamings account after the split is { (Round to the noarest doliac) The price per share of common stock after the spli is $. (Round to the nearest cent.) The esenings per share (EPS) after the spit is 5 (Round to the nearest cent) c. Which option wil aocomplish Wicker's goal of teducing the current stock prich while maintaining a stable lovel of retained earnings? (Select the best answer below) A. The option in part b, the stock splt, will accomplish the goal of reducing the stock price while maintaining a stable level of retained eamings. 8. The option in part a, the stock dividend, will accomplish the goal of reducing the stock price while maintaining a stable level of fetained eaenings. d. What legal contraints might encourage the firm to choose a stock aplk over a stock dividend? (Select tho best answer below) A. There would be no legal constraint to encourage the firm to choose a stock splt over a stock bvidend. B. The fim may be fentricted in the mumber of shares sf could bsue. c. The femi may be restricted in the amount of retained earings aralatie for diveend payments, whecher cash or stock dividends. D. The fim may be restricted in the amount of cash a holds. \begin{tabular}{lrr} \hline Preferred Stock & $ & 0 \\ Common Stock ( 200,000 shares at $1 par) & 200,000 \\ Paid-in capital in excess of par & 600,000 \\ Retained Earnings & 1,860,000 \\ Total Stockholders' equity & $2,660,000 \\ \hline \end{tabular} \begin{tabular}{lr} Price per share & $39 \\ Earnings per share & $4.00 \\ Dividend per share & $1.43 \\ \hline \end{tabular}