Assets

Cash

$20,000

AR

$ 110,00

Inventory

$120,000

Plant and Equipment

$ 250,000

Total Assets

$500,000

Liabilities and Equity

AP

$20,000

Long Term Debt

$100,000

Common Stock

( $ 8.00 PAR, 4000 shares outstanding)

$32,000

Additional Paid In Capital

$148,000

Retained Earnings

$200,000

Total Liabilities and Equity

$500,000

A Firm has above balance sheet:

a. Construct a new Balance sheet showing the impact of a three for one split. If current market price of stock is $ 54, what is price after split ?

b. Construct a new a Balance sheet showing the impact of a 10% stock dividend. After stock dividend, what is new price of the common stock ?