Assume That a Firm Had Shareholders' Equity on the Balance

Assume that a firm had shareholders' equity on the balance sheet at a book value of $1,200 at the end of 2005. During 2006 the firm earns net income of $900, pays dividends to shareholders of $400, and issues new stock to raise $250 of capital. The book value of shareholders equity at the end of 2006 is:

A) $2,750
B) $250
C) $1,450
D) $1,950