Columbia Paper has the following stockholders' equity account. The firm's common stock has a current market price of $31 per share.

Preferred stock $90,000

Common stock ( 11,000 shares at $4 par) $44,000

Paid-in capital in excess of par $297,000

Retained earnings $120,000

Total stockholders' equity $551,000

a. Show the effects on Columbia of a 15% stock dividend.

b. In light of part a, discuss the effects of stock dividend on stockholders' equity.