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The present market price per share is $36.

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Johore Trading Company has 2.4 million shares of common stock outstanding, and the present market price per share is $36. Its equity capitalization is as follows:

Common stock ($2.00 par; 2,400,000 shares)

$ 4,800,000

Additional paid-in capital

5,900,000

Retained earnings

87,300,000

Total shareholders' equity

$98,000,000

a. If the company were to declare a 12 percent stock dividend, what would happen to these accounts? A 25 percent stock dividend? A 5 percent stock dividend?

b. If, instead, the company declared a 3-for-2 stock split, what would happen to the accounts? A 2-for-1 stock split? A 3-for-1 split?

c. What would happen if there were a reverse stock split of 1 for 4? 1 for 6?

Reference no: EM13971372

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