Bell Company has 2 million shares of common stock with par of $10. Additional paid-in capital totals $15 million, and retained earnings is $15 million. The directors declare a 5% stock dividend when the market value is $10. The reduction of retained earnings as a result of the declaration will be :

a. $0.

b. $1 million.

c. $800,000.

d. $600,000

(Please show working)