The Walton Firm has 1,000,000 common shares issued and outstanding. This stock was issued at a premium above its $10 per share par value. During the current fiscal year, the board of directors declared a 15 percent stock dividend that created 10,000 new shares issued to the existing stockholders when the price of the stock was $35 per share. Based on this information, what is the amount of the reduction recorded in stockholders' equity?

a. $1,500,000

b. $3,500,000

c. $1,000,000

d. 0