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

Common stock ($1 par value) $ 10,000 Capital surplus 180,000 Retained earnings 586,500 Total owners’ equity $776,500

a. If Hexagon stock currently sells for $25 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?

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