Question (5) Assume a company with 500,000 shares of $10 par common stock outstanding pays a 20% stock dividend. The pre-dividend market value is $ 35. The following is the shareholders' equity accounts before stock dividend: Common stock 5,000,000 Additional Paid in Capital 5,000,000 Retrained Earning 5,000,000 Total 15,000,000 How does this impact the shareholders' equity accounts?

PFIN (with PFIN Online, 1 term (6 months) Printed Access Card) (New, Engaging Titles from 4LTR Press)
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ISBN:9781337117005
Author:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Publisher:Randall Billingsley, Lawrence J. Gitman, Michael D. Joehnk
Chapter12: Investing In Stocks And Bonds
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Question (5) Assume a company with 500,000 shares of $10 par common stock outstanding pays a
20% stock dividend. The pre-dividend market value is $ 35. The following is the shareholders' equity
accounts before stock dividend: Common stock 5,000,000 Additional Paid in Capital 5,000,000
Retrained Earning 5,000,000 Total 15,000,000 How does this impact the shareholders' equity
accounts?
Transcribed Image Text:Question (5) Assume a company with 500,000 shares of $10 par common stock outstanding pays a 20% stock dividend. The pre-dividend market value is $ 35. The following is the shareholders' equity accounts before stock dividend: Common stock 5,000,000 Additional Paid in Capital 5,000,000 Retrained Earning 5,000,000 Total 15,000,000 How does this impact the shareholders' equity accounts?
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