On January 1, 2017, Garner Corp. had 10,000 shares of $1 par value common stock issued and outstanding. The stock was selling at $10 per share. During 2017, Garner declared and issued a 10% stock dividend. The stock dividend causes

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A stock dividend redistributes a portion of the company's retained earnings to its shareholders in the form of additional shares, rather than cash. This action does not involve the inflow or outflow of any assets; it merely transfers a portion of retained earnings to common stock. Therefore, the total shareholders' equity remains unchanged.