Common stock ($1 par value) 406,000
Capital surplus 1,340,000Retained earnings 3,427,000
Total owners’ equity 5,173,000
suppose the company instead decides on a four-for-one stock split. The firm’s 85-cent per share cash dividend on the new (postsplit) shares represents an increase of 10 percent over last year’s dividend on the presplit stock. What effect does this have on the equity accounts? What was last year’s dividend per share?
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