Question
The Sweet Times Candy Company has the following equity accounts on its balance sheet: Common stock ($2 par, 450,000 shares) $ 900,000 Contributed capital in
The Sweet Times Candy Company has the following equity accounts on its balance sheet:
Common stock ($2 par, 450,000 shares) | $ | 900,000 |
Contributed capital in excess of par | 2,400,000 | |
Retained earnings | 11,700,000 | |
Total common stockholders equity | $ | 15,000,000 |
The current market price of the firms shares is $55.
If the firm declares a 15 percent stock dividend, what will be the impact on the firms equity accounts? Round your answers to the nearest dollar.
Common stock ($2 par, 517,500 shares) | $ |
Contributed capital in excess of par | $ |
Retained earnings | $ |
Total common stockholders equity | $ |
If the firm currently pays no cash dividend, what is the impact of a 15 percent stock dividend on the wealth position of the firms existing stockholders? The wealth position of existing shareholders will -Select-stay the sameincrease by 15%decline by 15%Item 5 .
If the firm currently pays a cash dividend of $2 per share and this per share dividend rate does not change after the 15 percent stock dividend, what impact would you expect the stock dividend to have on the wealth position of existing shareholders? The wealth position of existing shareholders is expected to -Select-increasedeclineItem 6 .
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