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 ?
83-68, the IRS ruled that a distribution of a stock dividend by a Federal Home Loan Bank (FHLB) to its member banks would be treated as a Sec.
A second German tax benefit results because the stock dividend earnings are characterized as share premium reserves or capital contributions.
It is also worth noting that this stock dividend issuance will occur without any action required on the part of PAIM shareholders.
Once all documentation is processed, we are hopeful that the new stock symbol, the exchange date for the 100 to 1 PGMC forward split, and the payment date for the stock dividend issuance will be given to us by NASDAQ within a few more days," President/CEO Gotanco added.
Shareholders of record on January 5, 2007 will be entitled to the 10% stock dividend.
Stockholders who hold their shares through a third party intermediary such as a brokerage firm will have an option to elect cash in lieu of the stock dividend.
The stock dividend is the fourth declared by Cass within the past four years.
However, by receiving dividends in the form of stock, instead of cash, the taxes on the stock dividend can be deferred.
NYSE: CX) announced today the completion of its stock dividend program determined at the Shareholders Meeting on April 27, 2006.
Nasdaq: INMD), the largest fertility services company in the United States, today announced that on May 22, 2006 the Board of Directors of the Company declared a 25 percent stock split effected in the form of a stock dividend.
AUSTIN, Texas -- Tensleep Corporation (OTC:TENS) ("Tensleep"), a business specializing in the research and development and the acquisition of intellectual property for use in the design and development of electronic products, announced that its board of directors has authorized a stock dividend payable in the common stock of Tensleep Financial Corporation ("Financial") to its stockholders as of May 29, 2006, payable June 30, 2006 on the basis of five shares of Wireless common stock for each 10 shares of Tensleep stock to shareholders holding 200 or more shares on March 31, 2006 (the "Stock Dividend").