I don't understand why retained earnings decreased. Thank you

HS ch 11 - solution.. T 4 19 Exercise 3 DORA Company declared and distributed a 10% stock dividend on 20,000 shares of issued and outstanding $5 par value common stock. The market price per share on the declaration date was $9 and was $10 on the distribution date. Which of the following correctly describes the accounting for the declaration and distribution of the stock dividend? A. Retained earnings decreased $20,000. B. Capital in excess of par increased $10,000. C. Common stock increased $18,000. D. Retained earnings decreased $18,000. SOLUTION A. Retained earnings decreased $20,000. B. Capital in excess of par increased $10,000. C. Common stock increased $18,000. D. Retained earnings decreased $18,000. The retained earnings decrease ($18,000) equals the number of shares issued (20,000 x 10%) multiplied by the market price per share ($9) on the declaration date