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borteleto borteleto
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5 years ago
What is the difference between a stock split and a stock dividend?
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5 years ago
 A stock dividend entails the distribution of additional shares of stock in lieu of a cash payment. A stock split involves exchanging more (or less in the case of a "reverse" split) shares of stock for the firm's outstanding shares. In both cases the number of common shares outstanding changes, but the firm's investments and future earnings prospects do not. In essence, the ownership pie is simply cut into more pieces (or fewer pieces in the case of a reverse split). The only difference between a stock dividend and a stock split relates to their respective accounting treatments. Both represent a proportionate distribution of additional shares to the current stockholders. However, for accounting purposes the stock split has been defined as a stock dividend exceeding 25 percent. Thus, a stock dividend is conventionally defined as a distribution of shares up to 25 percent of the number of shares currently outstanding.
 
borteleto Author
wrote...
5 years ago
Thank you for your assistance, again and again
wrote...
5 years ago
My pleasure
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