Explain the difference between a stock dividend and stock split
What will be an ideal response?
Corporations sometimes pay stock dividends instead of cash dividends. Stock dividends are additional shares of stock given to existing shareholders. An example would be one new share of stock given for every ten existing shares. A stock split involves the division of all of the current shares of stock. This is done to increase the numbers of shares. For example, a 2-for-1 stock split for a company with 200,000 shares authorized would result in 400,000 shares authorized.
You might also like to view...
Which of the following financial statements lists the entity's assets, liabilities, and stockholders' equity as of a specific date?
A) Balance sheet B) Statement of retained earnings C) Income statement D) Statement of cash flows
In terms of U.S. business-to-business direct marketing expenditures, the largest category is:
A) television B) Internet marketing (non-e-mail) C) direct mail (non-catalog) D) telephone marketing