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    Stock Split and Dividend Affect on Weighted Average of Shares

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    Explain how both a stock split and a stock dividend affect the computation of the weighted average number of shares outstanding.

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    https://brainmass.com/business/stock-dividends-and-stock-splits/stock-split-dividend-affect-weighted-average-shares-452615

    Solution Preview

    Explain how both a stock split and a stock dividend affect the computation of the weighted average number of shares outstanding.

    Meaning of stock dividend:

    When the company pays shares out of the net profit or retained earnings in lieu of cash dividend, then it is called stock dividend. Stock dividend results in increase in the number of shares. For example, if the company has 100000 shares and the ...

    Solution Summary

    The solution explains how both a stock split and a stock dividend affect the computation of the weighted average number of shares outstanding.

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