our company is contemplating a stock dividend and is seeking your advice on the reporting implications of their actions. Before the dividend there were, $10,000,000$ shares of $$1$ par value common stock. The market value on the date of the dividend was $$65$ per share.

One suggestiom is to declare and distribute $20\%$ stock dividend on the same day. IF this option is chosen the retained earnings will be reduced by what amount?

Instead, what amount will Retained earnings be reduced if the company declares and distributes an $80\%$ stock dividend?