Southern Fried Chicken has 8,000 shares of stock outstanding with a par value of $1 per share and a market value of $34 per share. The balance sheet shows $39,000 in the capital in excess of par account, $8,000 in the common stock account, and $152,000 in the retained earnings account. The firm just announced a 5 percent stock dividend. What will total owners' equity be after the dividend?
A. $185,800
B. $196,000
C. $199,000
D. $206,800
E. $212,200
Total equity will not change as this is a small stock dividend
Total equity = $39,000 + $8,000 + $152,000 = $199,000
Why Total equity will not change as this is a small stock dividend, why the equity value can't be calculate as the no of shares multiplied by the market value per share?