How does the declaration and distribution of a 15% stock dividend affect stockholders' equity?

Question

Quizplus · Accepted Answer

The declaration and distribution of a 15% stock dividend will not change the total stockholders’ equity. However, the balances of different accounts in stockholders' equity will change. The retained earnings account will decrease, while the common stock account will increase by the same amount as the dividend. As a result, the total amount of stockholders’ equity remains the same.

How Does the Declaration and Distribution of a 15% Stock