Question - On October 31, the stockholders' equity section of Pele Company's balance sheet consists of common stock $790,400 and retained earnings $445,100.
Pele is considering the following two courses of action:
(1) Declaring a 7% stock dividend on the 98,800 $8 par value shares outstanding
(2) Effecting a 2-for-1 stock split that will reduce par value to $4 per share.
The current market price is $17 per share.
Prepare a tabular summary of the effects of the alternative actions on the company's stockholders' equity and outstanding shares.