ABC Corp. has 675,000 shares of $1 par value common stock. The current market price...
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Accounting
ABC Corp. has 675,000 shares of $1 par value common stock. The current market price is $100. The CEO of the company is considering either a $1 per share cash dividend, or 12% stock dividend, or a 2-for-1 stock split. Calculate the impact on the items of stockholders' equity for each alternative option in the following table.
Option 1
Option 2
Option 3
Original Balances
If 2-for-1 stock split
After $1 per share cash dividend
If 12% stock dividend paid
Paid-in capital
$4,500,000.00
Retained earnings
$10,000,000.00
Total stockholders' equity
$14,500,000.00
Outstanding shares
$675,000
Par value per share
$1.0
Market value per share
$100
Total Market value of equity
$67,500,000.00
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