Purchase Solution

Stock Dividend/Stock Split: Differences

Not what you're looking for?

Ask Custom Question

A. Can you offer any differences between stock dividend and stock split?

b. If you were a stockholder, what would you prefere to see - your company declare a 100% stock dividend or - a 2-for-1 split?

Purchase this Solution

Solution Summary

The referenced solution explains the difference in terminology and the calculations involved. Even more important are four reasons presented to explain why companies do splits or stock dividends.

Solution Preview

A stock dividend and a stock split are essentially the same thing. It is a difference in terminology and more a matter of the degree to which a company wishes to increase their total number of shares outstanding. In your example, a 100% stock dividend is the same as a 2:1 stock split. In both cases, you will have started with 100 shares, but you end up with 200 shares.

Stock dividends tend to be something less than 2:1, and it may be that fractions are too hard, but percentages are easier. A 20% stock dividend would ...

Purchase this Solution


Free BrainMass Quizzes
Paradigms and Frameworks of Management Research

This quiz evaluates your understanding of the paradigm-based and epistimological frameworks of research. It is intended for advanced students.

Basics of corporate finance

These questions will test you on your knowledge of finance.

Change and Resistance within Organizations

This quiz intended to help students understand change and resistance in organizations

Situational Leadership

This quiz will help you better understand Situational Leadership and its theories.

Lean your Process

This quiz will help you understand the basic concepts of Lean.