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On October 31, the stockholders’ equity section of Sandhill Co.’s balance sheet consists of common stock...

On October 31, the stockholders’ equity section of Sandhill Co.’s balance sheet consists of common stock $356,000 and retained earnings $399,000. Sandhill is considering the following two courses of action:

(1) Declaring a 6% stock dividend on the 89,000 $4 par value shares outstanding
(2) Effecting a 2-for-1 stock split that will reduce par value to $2 per share.


The current market price is $18 per share.

Prepare a tabular summary of the effects of the alternative actions on the company’s stockholders’ equity and outstanding shares.

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