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A small stock dividend: Only affects the par value not the equity account balances. Reduces cash by the total market value of the issued shares.

A small stock dividend:

Only affects the par value not the equity account balances.

Reduces cash by the total market value of the issued shares.

Reduces retained earnings by the market price of each share issued.

Increases the common stock account by the market price of each share issued. Reduces retained earnings by the par value of each share issued.

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