1. Metromat has the following equity accounts on its balance sheet:

   Common stock ($2 par, 2.4 million shares)	$ 4,800,000
   Paid in excess	33,600,000
   Retained earnings	134,400,000
   Total common stockholders' equity	$172,800,000

   The current market price of Metromat's shares is $16. If the firm declares a 15% stock dividend and a $.15 per share cash dividend, what will be the impact on the paid in excess account? Assume a marginal tax rate of 40%.

   	a.	Increases $5.04 million
   	b.	Decreases $2.56 million
   	c.	Increases $5.76 million
   	d.	Does not change