Use the Following Information for Questions
on January 1

Multiple Choice

Use the following information for questions
On January 1, Canary Co. had total shareholders' equity as shown below when their shares were selling at $25 per share. $\begin{array}{ll}\text { Common shares (125,000 shares) } & \$ 2,500,000 \\\text { Retained earnings } & 4,000,000 \\\quad \text { Total shareholders' equity } & \$ 6,500,000\end{array}$
-If the company declared a 15% stock dividend, the number of issued and outstanding shares would:

A) remain unchanged
B) increase by 18,750 shares
C) decrease by 18,750 shares
D) total 143,700 shares