Stock Dividends The owners' equity accounts for Octagon International are shown here:

Common stock ($1 par value) $ 25,000 Capital surplus 135,000 Retained earnings 487,600 Total owners' equity $647,600

a. If the company's stock currently sells for $39 per share and a 10 percent stock dividend is declared, how many new shares will be distributed? Show how the equity accounts would change.

b. If the company declared a 25 percent stock dividend, how would the accounts change?

Show all the steps and don't round off calculations.