Fargo Industries reports 50,000 shares of $5 par value common stock authorized, 25,000 shares issued, and 25,000 shares outstanding. Because the company is currently short on cash, the Board of Directors decides to issue a 40% stock dividend. The current market rate for the company's common stock is $10 per share.

The declaration of stock dividends will

Group of answer choices

A) increase equity by $50,000.

B) increase common stock by $25,000.

C) decrease equity by $50,000.

D) increase liabilities by $25,000.