Johore Trading Company has 2.4 million shares of common stock outstanding, and the present market
January 8th, 2018
Johore Trading Company has 2.4 million shares of common stock outstanding, and the present market price per share is $36. Its equity capitalization is as follows:Common stock ($2.00 par; 2,400,000 shares)$ 4,800,000Additional paid-in capital5,900,000Retained earnings87,300,000Total shareholders’ equity$98,000,000a. If the company were to declare a 12 percent stock dividend, what would happen to these accounts? A 25 percent stock dividend? A 5 percent stock dividend?b. If, instead, the company declared a 3-for-2 stock split, what would happen to the accounts? A 2-for-1 stock split? A 3-for-1 split?c. What would happen if there were a reverse stock split of 1 for 4? 1 for 6?
