two answers are needed ;

please provide a reply for the discussions below

#1

From the e-Activity, contrast the differences between a stock dividend and a stock split. Imagine that you are a stockholder in a company. Determine whether you would prefer to see the company that you researched declare a 100% stock dividend or declare a 2-for-1 split. Provide support for your answer with one (1) real-world example of your preference.

The difference is largely one of accounting. In the case of a split, the firm simply increases the number of shares and simultaneously reduces the par or stated value per share. In the case of a stock dividend, there must be a transfer from retained earnings to capital stock. For most firms, a 100% stock dividend and a 2-for-1 split accomplish exactly the same thing; hence, investors may choose either one (Brigham & Ehrhardt 2014). When stock splits occur the share price will go down accordingly with the hope that additional investors will now have the funds to acquire an interest in the company. When stock price is too high it wont attract certain investors. I have no preference in the company I researched declaring a 100% stock dividend or a 2-for-1 split because they are accomplishing the same thing for the company. Since Im asked to choose I would choose a 2-for-1 split.

The company I researched in this weeks e-Activity was Macys.

On May 20 2009, the Macys, Inc. board of directors approved a 2-for-1 split of Macys, Inc. common stock. The split is structured in the form of a 100% stock dividend that was payable June 25, 2009 to shareholders of record on May 20, 2009. As a result of the stock split, each shareholder would receive one additional share of common stock for each share of common stock owned as of the close of business on the record date. A 100% stock dividend is a common way to implement a two-for-one stock split. On the payment date, June 25, 2009, each stockholder received one additional share of stock for each share owned as of the close of business on the record date, May 20, 2009.

I would choose a 2-for-1 split because the investor will have twice as many shares as he or she had on the close of business on the record date, at half the market price per share. For example:

If an investor owns 100 shares of FD as of the record date and the market price is $74.00/share, that investors total value is $7,400.00. After the split, the investor will have a total of 200 shares of stock, but the market price will be $37.00/share. The investors total investment value in FD remains the same at $7,400.00 until the stock price moves up or down.

Brigham, E. F., & Ehrhardt, M. C. (2014). Financial management (14th ed.). Mason, OH: South-Western Cengage Learning.

https://www.macysinc.com/for-investors/shareholder-services/stock-split/default.aspx

From the scenario, examine the dividend rate that TFC is paying in order to determine if the company should receive a rate adjustment. Suggest whether TFCs dividends should either (1) stay the same; (2) be increased; (3) or go down. Provide a rationale for your response.

TFC is paying a $10.00 per share dividend rate annually. When TFC is considering the amount and frequency of the payout for dividends they must consider what they will need for future earnings growth, as that is what should be left after they determine the fair and correct amount for a dividend and frequency of a payout. High growth firms early in their life usually have a very low or zero payout ratio. As they mature, usually you will they will tend to return more of the earnings back to its investors.

The average rate was 74.20% and in the 1990s it remained somewhere around 23.2%, a fraction of what dividends used to be. They should remain at $10.00 per share per year. I feel like if they can afford this in the midst of their expansion, they can almost promise on the back end of the expansion a higher and maybe more frequent dividend payout to their investors. I think the investors will appreciate keeping the payout where it is considering the companys growth.

#2 Please provide a response to my classmate

A stock dividend is the payment to shareholders of additional shares of equity rather than cash. Like stock dividends, the number of shares with a stock split increase through a proportional reduction in the per value of the shares. A 2-for-l stock split is recorded as a doubling of the number of shares outstanding and having of the par value of the share. They both have effects on a company's stock price. to avoid complication, a company will not have a dividends issue and a stock split around the same time. Effectively though, in situations where a dividend and a split occur, the shareholders who hold throughout this period will be paid the same amount in total dividends whether there was a split or not. Nike raised its quarterly dividend by 17% and announced a two-for-one stock split Thursday, a reflection of the shoe designers confidence in its growth potential. Todays increase, together with the four-year, $8 billion share repurchase program announced in September, reflects our commitment to delivering value for our shareholders and the ongoing confidence we have in our strategy to generate long-term profitable growth and strong cash flows, Nike CEO Mark Parker said in a statement. The Beaverton, Oregon-based company says it has returned more than $14 billion to shareholders through dividends and share buyback plans over the past 11 years. The sports apparel company said the split will be issued in the form of a 100% stock dividend payable on Dec. 24 to shareholders of record on Dec. 10.