A stock dividend does not reduce a corporation's assets or its stockholders' equity.

Question

Quizplus · Accepted Answer

A stock dividend involves the distribution of additional shares of stock to existing shareholders, rather than cash or other assets. As such, it does not reduce a corporation's assets or stockholders' equity. Instead, it simply changes the composition of the equity by increasing the number of shares outstanding and decreasing the value of each share proportionally. This can sometimes have an effect on the market value of the stock, but it does not impact the overall financial position of the company.

A Stock Dividend Does Not Reduce a Corporation's Assets or Its