The Western Pipe Company has the following capital section in its balance sheet. Its stock is currently selling for $$5$ per share.

Common stock $(40,000$ shares at $$2$ par$)$ $ $80,000$

Capital in excess of par $80,000$

Retained earnings $180,000$

Total equity $ $340,000$

The firm intends to first declare a $15$ percent stock dividend and then pay a $25-$cent cash dividend $($which also causes a reduction of retained earnings$).$ The Western Pipe Company has the following capital section in its balance sheet. Its stock is currently selling for $$5$ per share.

Common stock $(40,000$ shares at $$2$ par$)$ $ $80,000$

Capital in excess of par $80,000$

Retained earnings $180,000$

Total equity $ $340,000$

The firm intends to first declare a $15$ percent stock dividend and then pay a $25-$cent cash dividend $($which also causes a reduction of retained earnings$).$

The retain earnings are incorrect and I can't see the mistake. Can you help?

Thank you