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    How is a stock split different from a stock dividend?

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    What is a stock split? How is a stock split different from a stock dividend?

    Chiappetta, Larson, Wild, Fundamental Accounting Principles, 18th Ed., McGraw-Hill 2007, Original work published 1976).

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    Meaning of stock split:

    Stock split means decrease or increase in the number of shares of the company without altering the amount of share capital. Ex. One share, face value of $10 can be split into two shares of $ 5 each. Stock split will change the number of shares mentioned in the Balance sheet. If the share price is high and is not affordable to the small investors to buy the shares of the company, then company will split the ...

    Solution Summary

    How a stock split is different from a stock dividend is determined.