Vast Horizons has 20,000 outstanding shares of common stock with par value of $1.50 per share and market price on January 1 of $30.
A. Show the financial statement effects of the two independent equity transactions in the template below.
1. January 15: 6% stock dividend paid to common shareholders with current market price at $30
2. June 15: 28% stock dividend paid to common shareholders with current market price at $80
B. How have these two transactions changed the overall valuation of the firm?

Question

Vast Horizons has 20,000 outstanding shares of common stock with par value of $1.50 per share and market price on January 1 of $30.
A. Show the financial statement effects of the two independent equity transactions in the template below.
1. January 15: 6% stock dividend paid to common shareholders with current market price at $30
2. June 15: 28% stock dividend paid to common shareholders with current market price at $80
  B. How have these two transactions changed the overall valuation of the firm?

Quizplus · Accepted Answer

The Answer of Vast Horizons has 20,000 outstanding shares of common stock with par value of $1.50 per share and market price on January 1 of $30.
A. Show the financial statement effects of the two independent equity transactions in the template below.
1. January 15: 6% stock dividend paid to common shareholders with current market price at $30
2. June 15: 28% stock dividend paid to common shareholders with current market price at $80
  B. How have these two transactions changed the overall valuation of the firm?

Vast Horizons Has 20,000 Outstanding Shares of Common Stock with Par