Problem:
CBA Inc has 280,000 shares outstanding with a $5.5 par value. The shares were issued for $15.5. The stock is currently selling for $27.5. CBA has $6,000,000 in retained earnings and has declared a stock dividend that will increase the number of outstanding shares by 6.50%.
Required:
Question: What will be the capital in excess of par account after the stock dividend?
- $2,800,000
- $3,200,400
- $4,359,900
- $9,200,400
Note: Explain in detail and show all computations in proper way.