Below is partial balance sheet of Gemilang Berhad.

Par value of stock : RM 8.00

Common Share : RM 2 million

Paid in capital : RM 6 million

Retained earnings : RM 22 million

Total Net Worth : RM 30 million

The current market price of the common share is RM24.00

Show the effect on the companys capital position if company declares 20% stock dividend.

How much is the increasing value in paid up capital/premium?

Select one:

a.

RM 750,000

b.

RM 900,000

c.

RM 800,000

d.

RM 1,000,000