A small stock dividend:

Multiple Choice

is accounted for in exactly the same manner as a stock split.

results in a transfer of retained earnings to additional paid$-$in capital and also increases the number of shares outstanding and involves a pro rata reduction in the par value per share.

increases the number of shares outstanding and involves a pro rata reduction in the par value per share.

results in a transfer of retained earnings to common stock and additional paid$-$in capital.