A large stock dividend normally results in a transfer from Retained Earnings to Contributed Capital of an amount equal to the par value of the stock.

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A stock dividend involves issuing new shares of stock to existing shareholders based on their current ownership percentage. The size of the dividend is usually expressed as a percentage, and the stock's par value is used to determine the total amount of capital transferred from Retained Earnings to Contributed Capital. Therefore, a large stock dividend will typically result in a transfer from Retained Earnings to Contributed Capital equal to the par value of the stock.

A Large Stock Dividend Normally Results in a Transfer from Retained