The declaration and issuance of a dividend in shares (stock dividend) greater than 25% of the shares previously in circulation (outstanding) to. increases contributed capital in excess of par value but does not change shareholders' equity. b. increases common stock outstanding and increases total stockholders' equity. C. it decreases retained earnings but does not change total stockholders' equity.

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A: 1-i. Outstanding stock is the shares actually sold.

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Stockholder's Equity

The stockholders’ equity (often referred to as the book value of the company) is the number of assets available to the stockholder after its entire liabilities is paid off. The stockholders’ equity is also sometimes referred to as owner's equity. The stockholders’ equity or book value generally includes common stock, treasury stock retained earnings. It is an indicator of a company's financial strength and is an important item on the company's balance sheet.