Prepare a tabular summary of the effects of the alternative

Reference no: EM13574329

On October 31, the stockholders' equity section of Omar Company consists of common stock $560,400 and retained earnings $439,100.

Omar is considering the following two courses of action:

(1) Declaring a 7% stock dividend on the 93,400, $6 par value shares outstanding
(2) Effecting a 2-for-1 stock split that will reduce par value to $3 per share.

The current market price is $16 per share.

Instructions

Prepare a tabular summary of the effects of the alternative actions on the components of stockholders' equity and outstanding shares. Use the following column headings: Before Action, After Stock Dividend, and After Stock Split.

Reference no: EM13574329

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