Hernandez Company has 490,000 shares of $10 per value common stock outstanding. During the year, Hernandez declared a 10% stock dividend when the market price of the stock was $30 per share. Four months later Hernandez declared a $.50 per share cash dividend. As a result of the dividends declared during the year, retained earnings decreased by
a. 1,739,500
b. 735,000
c. 269,500
d. 245,000
Answer: a. 1,739,500
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