Question

on January 31,2009,Village Bank had 500000 shares of $2 par value common stock outstanding. On that date the company declared a 14% stock dividend when the market price of the stock was $37 per share. The immediate effect of this dividend upon Village Bank was?​

Answer 1

A reduction in retained earnings of $2,950,000.

$37(500,000 x .14) = &2,590,000