A company whose stock is selling for $60 has the following balance sheet:
Assets $30,000,000
Liabilities $14,000,000
Preferred stock1,000,000
Common stock ($12 par;
100,000 shares outstanding) 1,200,000
Paid-in capital1,800,000
Retained earnings 12,000,000
Construct a new balance sheet showing the effects of a 3-for-1 stock split. What is the new price of the stock?
Construct a new balance sheet showing the effects of a 10 percent stock dividend. What will be the approximate new price of the stock?
Answer will be sent by email as attachment.
