The company with the common equity acounts shown here has declared a 15 percent stock dividend when the market value of its stock is $35 per share. Common Stock ($1 par value) $ 406,000Capital Surplus 1,340,000Retained Earnings 3,427,000 -------------------- + Total Owners' Equity $ 5,173,000 Suppose the company instead decides on a four-for-one stock split. The firm's 85-cent per-share cash dividend on the new (post split) shares represents an increase of 10 percent over last year's dividend on the presplit stock. What effect does this have on the equity accounts? What was last year's dividend per-share?
The company with the common equity acounts shown here has declared a 15 percent stock dividend when the market value of its stock is $35 per share.
Common Stock ($1 par value) $ 406,000
Capital Surplus 1,340,000
Retained Earnings 3,427,000
-------------------- +
Total Owners' Equity $ 5,173,000
Suppose the company instead decides on a four-for-one stock split. The firm's 85-cent per-share cash dividend on the new (post split) shares represents an increase of 10 percent over last year's dividend on the presplit stock. What effect does this have on the equity accounts? What was last year's dividend per-share?
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