stock dividend
stock dividend
Definition
stock dividend
noun
- a dividend in the form of shares of stock
- the payment of such a dividend
stock dividend Finance Definition
Giving
shareholders additional shares of stock. A stock dividend doesnt involve
assets being distributed as a cash dividend does. Total stockholders equity is
not affected by a stock dividend. Instead, a stock dividend transfers equity
from the retained-earnings section to the contributed-capital section of the
stockholders equity section on the companys balance sheet. One reason
companies do a stock dividend is to give shareholders a financial reward
without paying out cash. Also, a stock dividend spares shareholders from paying
tax on a dividend.
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