Final answer:
A stock dividend equal to 30% of the previously outstanding shares is being declared. The number of outstanding shares will increase, which means stockholders will receive additional shares in proportion to the number of shares they currently own.
Step-by-step explanation:
A stock dividend equal to 30% of the previously outstanding shares is declared. In this scenario, the number of outstanding shares is increasing. This means that the stockholders will receive additional shares of stock in proportion to the number of shares they currently own.
For example, if a shareholder owns 100 shares before the stock dividend, they will receive an additional 30 shares (30% of 100) after the stock dividend is declared. This increase in the number of shares does not change the overall value of the stock owned by the shareholder.