Show the effect of stock split on the capital account

Reference no: EM131792473

Question: Austin Power Company has the following balance sheet:

The firm has a market price of $11 a share.

a. Show the effect on the capital account(s) of a two-for-one stock split.

b. Show the effect on the capital account of a 10 percent stock dividend. Part b is separate from part a. In part b do not assume the stock split has taken place.

c. Based on the balance in retained earnings, which of the two dividend plans is more restrictive on future cash dividends?

Reference no: EM131792473

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