Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:Stock dividend-Firm Columbia Paper has the following stockholders' equity account. The firm's common stock has a current market price of $32 per share.
tions
Preferred stock
Common stock (11,000 shares at $2 par)
Paid-in capital in excess of par
Retained earnings
$110,000
22,000
330,000
120,000
Total stockholders' equity
$582,000
a. Show the effects on Columbia of a 10% stock dividend.
b. In light of your answers to part a, discuss the effects of stock dividend on stockholders' equity.
a. The preferred stock of Columbia after a 10% stock dividend is $
(Round to the nearest dollar.)
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