Shareholder's Equity Questions

Testbank, Question 70 on January 1, Carita's Dancing Divas had total shareholders' equity as shown below when their shares were selling at $25 per share: Common shares (125,000 shares).... $2,500,000 Retained earnings. 4,000,000 Total shareholders' equity. $6,500,000 Assume the company declared a issued a 10% stock dividend and that the market price remained constant. The effect of this dividend would increase common shares by $312,500. ncrease common shares by $250,000. decrease retained earnings by $250,000. increase common shares by $400,000