The declaration and issuance of a stock dividend larger than 25% of the shares previously outstanding

The declaration and issuance of a stock dividend larger than 25% of the shares previously outstanding

a. increases common stock outstanding and increases total stockholders' equity.
b. decreases retained earnings but does not change total stockholders' equity.
c. may increase or decrease paid-in capital in excess of par but does not change total stockholders' equity.
d. increases retained earnings and increases total stockholders' equity.


Answer: decreases retained earnings but does not change total stockholders' equity