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Question
Use the following information to answer the following question(s).Your firm is planning to pay a 15% stock dividend. The market price for the stock has been $84. The table below presents the equity portion of your firm's balance sheet before the dividend.
| Common stock | |
| Par value | |
| (1 million shares | |
| outstanding; $4 par value) | $4,000,000 |
| Paid-in capital | 16,000,000 |
| Retained earnings | 30,000,000 |
| Total equity | $50,000,000 |
If instead of a stock dividend, your firm decided to split the stock 2-1, then the number of shares outstanding and their par value per share would be:
A) 1 million; $4.
B) 1 million; $8.
C) 2 million; $2.
D) 2 million; $4.
Answer
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