Stock Dividends The owners’ equity accounts for Hexagon International are shown here:

Common stock ($1 par value) $ 30,000 Capital surplus 185,000 Retained earnings 627,500 Total owners’ equity $842,500

a. If Hexagon stock currently sells for $37 per share and a 10 percent stock dividend is declared, how many new shares will be distributed? Show how the equity accounts would change.

b. If Hexagon declared a 25 percent stock dividend, how would the accounts change?