On October 1, 2016, Chief Corporation declared and issued a 10% stock dividend. Prior to this date,

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Question:

On October 1, 2016, Chief Corporation declared and issued a 10% stock dividend. Prior to this date, chief had 80,000 shares of $5 par common stock outstanding. The market value of Chief Corporation on the date of declaration was $10 per share. As a result of this dividend, Chief's retained earnings will:

A. Decrease by $80,000

B. Not charge

C. Decrease by $40,000.

D. Increase by $80,000.