King Corp. has one million shares outstanding with a par value of $5. On August 24 of this year, it issued a 10% stock dividend when its stock price was $25. As a result of this stock dividend, retained earnings is:

A) Increased by $500,000.

B) Increased by $2,500,000.

C) Decreased by $500,000.

D) Decreased by $2,500,000