A corporation with $10 par common stock issues a small stock dividend. The capitalization of retained earnings is equal to:
A. The market value of the shares outstanding.
B. The par value of the shares outstanding.
C. The par value of the shares to be distributed.
D. The market value of the shares to be distributed.
E. There is no capitalization of retained earnings in the case of a small stock dividend.
Answer: D
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