Average Corporation has the following capital stock outstanding at the end of 2004:

Preferred stock, 6 percent, par $15, outstanding shares. 8.000.

Common stock, par $8. outstanding shares, 30,000.

On October 1, 2004. the board of directors declared dividends as follows:

Preferred stock: Full cash preference amount, payable December 20. 2004.

Common stock: 10 percent common stock dividend (i.e., one additional share for each 10 held), issuable December 20, 2004.

On December 20. 2004, the market prices were preferred stock. $40. and common stock. $32.

Required:

Explain the overall effect of each of the dividends on the assets, liabilities, and stockholders' equitv of the company.