Question: Ray Corp. declared a 5% stock dividend on its 10,000 issued and outstanding shares of $2 par value common stock, which had a fair value

Ray Corp. declared a 5% stock dividend on its 10,000 issued and outstanding shares of $2 par value common stock, which had a fair value of $5 per share before the stock dividend was declared. This stock dividend was distributed sixty days after the declaration date. By what amount did Ray’s current liabilities increase as a result of the stock dividend declaration?

a. $0

b. $ 500

c. $1,000

d. $2,500

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