Assignment:
Columbia paper has the following stockholders equity account. The firm's common stock has a current market price of $30 per share.
Preferred stock $100,000
Common stock (400,000 shares at $2 par) $20,000
paid-in capital in excess of par $ 280,000
Retained earnings $, 100,000
Total stockholders equity $500,000
A. Show the effects on Columbia of a 5% stock dividend?
B. Show the effects of (1) A 10% AND (2) A 20% stock dividend.
C. In light of your answers to parts a and b, discuss the effects of stock dividends on stockholders equity.