Caswell Cassey Pharmaceutical has a stockholders' equity account as shown below. The firm's common stock currently sells for $20 per share. Preferred stock $ 500,000 Common stock (2,000,000 shares @ $1 par) 2,000,000 Paid in capital in excess of par 10,000,000 Retained earnings 11,600,000 ___________ Total stockholders' equity $24,100,000 a. What is the maximum dividend per share Caswell Casey can pay? (Assume capital includes all paid in capital.) b. Recast the partial balance sheet (the stockholders' equity accounts) to show independently 1. a 2 for 1 stock split of the common stock. 2. a cash dividend of $1.50 per share. 3. a stock dividend of 5% on the common stock. c. At what price would you expect the Caswell Cassey stock to sell after 1. the stock split? 2. the stock dividend?
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