A stock dividend and a stock split should, at least conceptually, have the same effect on shareholders' wealth.

Question

Quizplus · Accepted Answer

Both a stock dividend and a stock split increase the number of shares held by shareholders, while decreasing the price per share. This should have the same effect on the overall value of the shareholder's investment. However, there may be some differences in how taxes are applied or in the perception of the company's future prospects based on the decision to issue a stock dividend versus a stock split.

A Stock Dividend and a Stock Split Should, at Least