Stock Dividend

Knowledge Center

What is Stock Dividend? Meaning.

A Stock Dividend is the process of paying shareholders in the form of securities rather than in cash. This can be additional shares in the company, or it may be shares in a subsidiary being spun off to shareholders. The number of shares received are normally a percentage of the shares that were already owned.

It does not involve a distribution of assets as a regular cash dividend does: total stockholders equity is not affected by a stock dividend, since the equity is only transferred from the Retained Earnings to the contributed capital section of the Balance Sheet.

Form the point of view of the firm, these dividends conserve cash that can be used to run or expand the business. For the investors, stock dividends usually offer tax advantages above a cash dividend.

Forum - Stock Dividends   Discussions about Stock Dividends. Stock Dividend Cases and Examples Hi, do you know of a remarkable case or an interesting example of the use of stock dividend?Please share it by entering (...)

Compare with: Retained Earnings  |  Spin-Off  |  Employee Stock Ownership Plan

Return to Management Hub: Finance & Investing

More on Management  |  Return to Management Dictionary  | 

This ends our Stock Dividend summary and forum.