1. Most firms would like to have their stock selling at a high price/earnings (P/E) ratio, and they would also like to have a large number of different shareholders. Explain how stock dividends or stock splits might help achieve these goals.
2. What is the difference between a stock dividend and a stock split? As a stockholder, would you prefer to see your company declare a 100 percent stock dividend or a 2-for-1 split? Assume that either action is feasible.

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