In: Finance
Milwaukee Tool has the following stockholders' equity account. The firm's common stock currently sells for $3.11per share:
a. Show the effects on the firm of a cash dividend of
$0.200.20
per share.
b. Show the effects on the firm of a 55% stock dividend.
c. Compare the effects in parts a and
b. What are the significant differences between the two methods of paying dividends?
a. The balance in preferred stock after the $0.20 cash dividend is $______
(Round to the nearest dollar.)
Preferred stock |
$
91 comma 00091,000 |
Common
stock
(400 comma 000400,000 shares at$0.910.91 par) |
364 comma 000364,000 |
Paid-in capital in excess of par |
213 comma 000213,000 |
Retained earnings |
Modifying 390 comma 000 with underline 390,000 |
Total stockholders' equity |
Modifying $ 1 comma 058 comma 000 with double underline$1,058,000 |