What are the definitions of stock dividends and stock splits? And what are the primary reasons for a firm to declare a stock split or stock dividend?© BrainMass Inc. brainmass.com October 10, 2019, 3:01 am ad1c9bdddf
What are the definitions of stock dividends and stock splits; and, what are the primary reasons for a firm to declare a stock split or stock dividend?
Definition of stock dividend:
Stock dividend means issuing additional shares to the existing shareholders on the basis of the number of shares held by them out of the net income or retained earnings of the company. A stock dividend is issued free of cost to the shareholders. Issue of stock dividend increases the share of capital of the company.
Definition of stock split:
Stock split means a decrease or increase in the number ...
This solution provides a definition of stock dividends and stock splits and explains why a firm would choose to issue either of these.