Problem:
CBA Inc has 400,000 shares o/s with a $5 par value. The shares were issued for $12/share. The stock is currently selling for $34/share. CBA has $5,000,000 in Ret. Earnings and has declared a stock dividend that will increase the number of o/s shares by 6%.
Requirement:
Question: What will be the capital in excess of par account after the stock dividend?
- $7,685,000
- $2,685,000
- $3,496,000
- $2,385,000
Note: Explain all steps comprehensively.