Stock Dividend

(redirected from Stock Dividends)
Also found in: Dictionary, Thesaurus, Financial.

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 ?
Of note is that the ruling neither cited nor discussed the prior rulings or case law addressing stock dividends that take place when shareholders have a pre-existing outstanding right to require the redemption of their stock both before and after the distribution.
It is also worth noting that this stock dividend issuance will occur without any action required on the part of PAIM shareholders.
The 10% stock dividend will be payable on January 17, 2005 to holders of record December 31, 2004.
Silveri, Chairman of the Board of Directors, stated: "The additional 7,000,000 shares will allow the Board to execute the stock dividend and provide additional capacity for accommodating other opportunities consistent with our publicly announced objectives to expand our business through branching and acquisitions.
American Bank (OTCBB: BKMD) Rockville, Maryland announced today that The Board of Directors has declared a Five Percent (5%) stock dividend to shareholders of record as of March 15, 2002.
Littlefield Corporation's Board of Directors has given authority to Management to issue a ten percent (10%) stock dividend to shareholders of record at a future date to be determined.
These include national and regional economic conditions, the continued payment of annual stock dividends, and government and regulatory actions the might cause actual events to differ materially from statement expectations.
The cash and two-percent stock dividends are payable on July 2, 2001, to shareholders of record on June 18, 2001.
Benjamin Hong, president and chief executive officer, stated, "The board of directors of Nara Bank has decided to differentiate Nara Bank from other Korean community banks, which offer annual stock dividends.
These cash and stock dividends together underscore our ongoing commitment to reward our shareholders.