Stock Dividend vs Stock Split
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What is a stock dividend? How does this differ from a stock split?
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This posting differentiates between a Stock Dividend and a Stock Split.
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A stock dividend is a distribution of new stock to existing investors, usually instead of a cash dividend. Shareholders who originally owned say, 100 shares, might receive an extra five shares as a stock dividend, giving them 105 shares in total. Since everyone receives the same proportional distribution, however, this "dividend" has no real value and the firm's stock price should decline by roughly the amount of the stock ...
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