The condensed balance sheet of Laporte Corporation reports the following amount:

Total Assets $16,000,000

Total Liabilities $6,000,000

Shareholders' equity

Common shares, unlimited number authorized, 400,000 issued $2,000,000

Retained earnings $8,000,000 10,000,000

Total liabilities and shareholders' equity $16,000,000

The common shares are currently trading for $30 per share. Laporte wants to assess the impact of three possible alternatives on the corporation and its shareholders:

1. Payment of a $1.50 per share cash dividend

2. Distribution of a 5% stock dividend

3. A three-for-two stock split

Instructions:

(a) Determine the impact of each alternative on (1) Assets, (2) Liabilities, (3) Common shares, (4) Retained earnings, (5) Total shareholders' equity, and (6) the number of shares.

(b) Assume a Laporte shareholder currently owns 1,000 common shares for which she paid $28,000. What is the impact of each alternative for the shareholder, assuming the share price changes proportionately with the alternative?