Stock split versus stock dividend Distilled Water Corporation is a company special- izing in water purification and distributing bottled water to retailers. The corpora tion is considering a 3-for-2 stock split. The current stock price is $25 per share. The stockholders' equity account is as follows: Preferred stock S 500,000 Common stock (150,000 shares at $6 par) 900.000 Paid-in capital in excess of par 2,850,000 Retained earnings 760,000 Total stockholders' equity $5,010,000 a. What changes will occur in the stockholders' equity account from the 3-for-2 stock split? b. What change would you expect in the stock price as a result of the stock split? c. Calculate the maximum cash dividend per share that the firm could pay on com- mon stock before and after the stock split, assuming that legal capital includes all paid-in capital. d. A stockholder owns 200 shares. Based on the maximum dividends payable (see part c), would the stockholder prefer the 3-for-2 stock split? e. Differentiate between stock splits and stock dividends