Knapp Incorporated had 1,000,000 shares of $4 par value common stock authorized. On December 31, 2021, there were 400,000 shares issued and outstanding. The market value of its common stock on that date was $100 per share. On January 5, 2022, the board of directors declared a stock dividend.

Required: a. Assume that you have 100 shares of Knapp Incorporated common stock. Determine how many shares will you have after a 100% stock dividend.

b. Briefly explain the how a 100% stock dividend affects the stockholders' equity accounts and the total resources of the company. (Do not quantify the impacts or prepare a journal entry.) c. Assume instead that the board declared a 10% stock dividend. Briefly explain how that 10% stock dividend affects the stockholders' equity accounts and the total resources of the company. (Do not quantify the impacts or prepare a journal entry.)

d. Identify three possible explanations for the declaration of a stock dividend.