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 20% 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 as follows:

Preferred stock $0

Common Stock (100,000 shares at $1 par) 100,000

Paid-in capital in excess of par 900,000

Retained earnings 700,000

Total stockholders equity $1,700,000

Price per share $30

Earnings per share $3.60

Dividend per share $1.08

a. Show the effect on the equity accounts and per-share data of a 20% stock dividend.

b. Show the effect on the equity accounts and per-share data of a 5-for4 stock split.

c. Which option will accomplish Wicker's goal of reducing the current stock price while maintainig a stable level of retained earnings?

d. What legal constraints might encourage the firm to choose a stock split over a stock dividend?

**Show work please***