Stock Dividend

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Related to Stock Dividend: stock split, Cash dividend

Stock Dividend

A corporate distribution to shareholders declared out of profits, at the discretion of the directors of the corporation, which is paid in the form of shares of stock, as opposed to money, and increases the number of shares.

When a corporation declares a stock dividend, it adds undivided profits, which cannot be used to pay dividends, to the capital invested in the corporation, to reflect the additional shares it is issuing. The stockholder's increased number of shares represent the same proportion of the value of the company as the stockholder originally held (that is, the stockholder owns the same percentage of the corporation as prior to the declaration of the stock dividend); however, the cash value of an individual share is not reduced.

Shares issued as stock dividends are evidence that additional assets have been added to the capital. The value of the shares of a corporation often, but not always, increases following a stock dividend. A stock dividend is actually a part of corporation bookkeeping.

A stock split is different from a stock dividend in that no adjustment is made to the capital; instead, the number of shares representing the capital increase. The cash value of an individual share, therefore, decreases in proportion to the size of the stock split.

References in periodicals archive ?
If a corporation with a buy-back plan declares a stock dividend, a shareholder's redemption right under the plan might be viewed as an election by the shareholder to receive a stock split distribution in either stock or property under Sec.
This action marks the third stock dividend that the Board has declared over the past 18 months," said Robert G.
Combined with the quarterly cash dividends, this 5 percent stock dividend results in a very attractive return to many shareholder investors," said Sickels.
If the GmbH were to declare a stock dividend equal to its accumulated retained earnings, a German tax refund of approximately DM 2,800,000 ($1,700,000) could be obtained.
The positive effect of this is that more shareholders can avail of this stock dividend in a solid company with bright potentials such as Phil Oil.
This action marks the second consecutive year that the board has declared a stock dividend and the fourth consecutive year in which the board has approved an increase in the regular cash dividend," said Robert G.
OTC:PGMC)(New Stock Symbol pending NASDAQ advise), and the stock dividend issuance of PGMC common shares to Pearl Asian Mining Industries (OTC:PAIM) shareholders.
Smith, president and chief executive officer of Webster, stated: "The 10 percent stock dividend and the board's intention to continue the cash dividend at the same rate reflect Webster's continued strong financial condition and increased earnings.
Pearl Asian Mining Industries Reports Landowner of Property Adjacent to XYZ Mine Site Agreeable to Allow Immediate Passage to Commence Geological Survey and More Detailed Sampling, Subject to Mutually Beneficial Terms; PAIM Provides Clarification on Issuance of Stock Dividends of PGMC to PAIM Common Shareholders as of Record Date of Feb.
Jones, chairman of the board and chief executive officer of the company, said, "This stock dividend continues our tradition since 1985 of rewarding our shareholders for their loyalty and support with stock dividends.
Myers, President and Chief Executive Officer, stated that, "The decision by the Board of Directors to declare the stock dividend and the $0.