MYFINANCELAB ACC.F/PRIN.OF MGR.FIN. >I<
MYFINANCELAB ACC.F/PRIN.OF MGR.FIN. >I<
14th Edition
ISBN: 9781323247655
Author: Gitman
Publisher: PEARSON
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Chapter 14, Problem 14.9P

Stock dividend: Firm Columbia Paper has the following stockholders’ equity account. The firm’s common stock has a current market price of $30 per share.

Preferred stock $100,000
Common stock (10,000 shares at $2 par) $20,000
Paid-in capital in excess of par $280,000
Retained earnings $100,000
Total stockholders’ equity $500,000
  1. a. Show the effects on Columbia of a 5% stock dividend.
  2. b. Show the effects of (1) a 10% and (2) a 20% stock dividend.
  3. c. In light of your answers to parts a and b, discuss the effects of stock dividends on stockholders’ equity.
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MYFINANCELAB ACC.F/PRIN.OF MGR.FIN. >I<

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Dividend explained; Author: The Finance Storyteller;https://www.youtube.com/watch?v=Wy7R-Gqfb6c;License: Standard Youtube License