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Swifty Company has had 4 years of net income. Due to this success, the market price of its 477,000 shares of $5 par value
Swifty Company has had 4 years of net income. Due to this success, the market price of its 477,000 shares of $5 par value common stock has increased from $14 per share to $51. During this period, paid-in capital remained the same at $2,300,000. Retained earnings increased from $1,720,000 to $13,000,000. President E. Rife is considering either a 16% stock dividend or a 2-for- 1 stock split. (a) He asks you to show the before-and-after effects of each option on retained earnings. Retained earnings after stock dividend $ Retained earnings after stock split eTextbook and Media eTextbook (b) Save for Later SA Assistance Used Attempts: 0 of 3 used Submit Answer He asks you to show the before-and-after effects of each option on total stockholders' equity. Total stockholders' equity after stock dividend $ Total stockholders' equity after stock split +A $
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a To calculate the effects of a stock dividend and a stock split on retained earnings we need to consider the changes in the number of shares and the ...Get Instant Access to Expert-Tailored Solutions
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