On january 1, sandhill co. had total shareholders' equity as shown below when their shares were selling at $23 per share:
common shares ( 136000 shares) $ 2720000
retained earnings 4352000
total shareholders' equity $ 7072000
assume the company declared and issued a 10 % stock dividend and that the market price remained constant .
the effect of this dividend would
a. decrease retained earnings by $ 272000 .
b. increase common shares by $ 435200 .
c. increase common shares by $ 312800 .
d. increase common shares by $ 272000 .