Stock dividend versus stock split-Firm The board of Wicker Home Health Care, Inc., is exploring ways to expand the number of shares outstanding in an effort to reduce the market price per share to a level that the firm considers more appealing to investors. The options under consideration are a 30% stock dividend and, alternatively, a 5 -for-4 stock split. At the present time, the firm's equity account and other per-share information are given as follows: a. Show the effect on the equity accounts and per-share data of a 30% stock dividend. b. Show the effect on the equity accounts and per-share data of a 5 -for-4 stock split. c. Which option will accomplish Wicker's goal of reducing the current stock price while maintaining a stable level of retained earnings? d. What legal constraints might encourage the firm to choose a stock split over a stock dividend? \begin{tabular}{lrr} \hline Preferred Stock & $r \\ Common Stock (300,000 shares at $1 par) & 300,000 \\ Paid-in capital in excess of par & 900,000 \\ Retained Earnings & 2,460,000 \\ Total Stockholders' equity & $3,660,000 \\ & $ \\ Price per share & $24 \\ Earnings per share & $1.13 \\ Dividend per share & \\ \hline \end{tabular}