Davidsons has a market value of $10.6 per share. The balance sheet shows $4,250,000 in the common stock at $1 par, $40,800,000 in the capital in excess of par account, and $2,875,000 in the retained earnings account. The firm just announced a stock dividend of 50 percent.   What is the value of the retained earnings account after the dividend?

Essentials Of Investments
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ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
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Chapter1: Investments: Background And Issues
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Davidsons has a market value of $10.6 per share. The balance sheet shows $4,250,000 in the common stock at $1 par, $40,800,000 in the capital in excess of par account, and $2,875,000 in the retained earnings account. The firm just announced a stock dividend of 50 percent.

 

What is the value of the retained earnings account after the dividend?

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