Smooth shampoo has 1,000,000 shares of common stock authorized with a par of $1 per share, of which 500,000 shares are outstanding. when the market value was $9 per share, smooth declared and issued a 10% stock dividend, as a result of this dividend, Smooth's retained earnings will:

a. decrease by $450,000

b. decrease by $50,000

c. increase by $450,000

d. no change.