On August $8,$ Koch & Dietz Corporation has $3,000,000$ shares of its $$5$ par common shares outstanding. The current market value of the shares is $$7\mathrm{.}70.$ Koch & Dietz issued a stock dividend of $500,000$ shares. What is the effect on retained earnings?

a$.$ Retained earnings would increase by $$3,850,000.$

b$.$ Retained earnings would increase by $$3,000,000.$

c$.$ Retained earnings would decrease by $$3,850,000.$

d$.$ Retained earnings would decrease by $$3,000,000.$