The Saw Mill Has Shares of Stock Outstanding with a Par

Multiple Choice

The Saw Mill has shares of stock outstanding with a par value of $1 per share and a market-to-book ratio of 2.1.The balance sheet shows $5,000 in the common stock account,$58,000 in the capital in excess of par account,and $32,500 in the retained earnings account.The firm just announced a stock dividend of 50 percent.What is the book value of the common stock account after the dividend?

A) $10,000
B) $8,500
C) $9,000
D) $7,500
E) $5,000