Stock Dividend Question

CFA Question of the day from Schweser:

Company pays a 5% stock div when mv exceeds par value.

Effect on common stock and total s/e items will be:

Answer is easy, common stock will increase, retained earnings will decrease, so no change on total s/e.

Paid in capital increases by the difference between # shares issued (mv-par value)

Two questions:

They mention in the solution that b/c the stock div is less than 20% current mv can be used. What would we use if it was greater than 20%? Par value?

What would be the accounting treatment be if the mv was less than par value. Would we still add the new # of shares to common stock and then subtract the difference between mv and pv from contributed capital? Or just leave contributed capital alone? I am assuming it is the latter.

Thanks very much