3. What is the difference between a stock dividend and a stock split?

Expert Solution

Difference is given below in tabular form.

	Stock dividend	Stock Split
1	Stock dividend is a process of issuing new stock to current stockholders free of cost.	Stock split is a method by which one stock is divided into multiple number of stock. Say stock split of 4 for 1, It means 4 shares converted into 1 share.
2	Stock dividend is an alternate of cash dividend. Only difference is stockholders don’t get money but get new shares.	Stock split is done to increase the value of the company and sometimes stock split is done to make shares more affordable for investors.
3	Issue of Stock dividend increase number of shares and total paid up capital.	Number of shares increase but the paid up capital remains same.
4	Stock dividend reduces retained earnings.	Stock split have no effect on retained earnings.
5	The market value of shares remains same when stock dividend are issued.	The market value of shares decreases everytime stock split is done.

ekkarill92 answered 7 months ago

explain the difference between: a cash dividend, a stock dividend, and a stock split? 2.explain the...

explain the difference between: a cash dividend, a stock dividend, and a stock split? 2.explain the difference between: authorized shares, issued shares, outstanding shares, and treasury stock?

What is the difference between a stock split and a stock split effected in the form...

What is the difference between a stock split and a stock split effected in the form of a stock dividend? Which requires journal entries? Finally, what is a reverse stock split, and why would a company have one?

a) What’s the difference between a stock dividend and a stock split? b) How do...

a) What’s the difference between a stock dividend and a stock split? b) How do stock dividends and splits affect stock prices? c) In what situation should a firm pay a stock dividend? d) In what situation should a firm split its stock? e) Consider the following case: You have 100 common shares of Comm Suppliers Inc. (CSI) The EPS is $4.00, the DPS is $2.00; and the stock sells for $60 per share. If CSI...

QUESTION 3 Explain the difference between a large stock dividend and a small stock dividend. In...

QUESTION 3 Explain the difference between a large stock dividend and a small stock dividend. In addition, explain how to record these two types of stock dividends.

What is stock split? Distinguish between a bonus issue and a stock split.

Stock split versus stock dividend---Firm Mammoth Corporation is considering a 3-for-2 stock split. It currently has...

Stock split versus stock dividend---Firm Mammoth Corporation is considering a 3-for-2 stock split. It currently has the stockholders' equity position shown. The current stock price is $120 per share. The most recent period's earnings available for common stock is included in retained earnings. Preferred stock $ 1,000,000 Common stock (130,000 shares at $5 par) 650,000 Paid-in capital in excess of par 1,700,000 Retained earnings 10,000,000 Total stockholders' equity $13,350,000 a. What effect on Mammoth's equity account would result from...

Discuss the differences between a stock dividend and a stock split. Why are these actions important...

Discuss the differences between a stock dividend and a stock split. Why are these actions important to stockholders?

(1) What is a dividend and what is the difference between cash dividends and stock dividends?...

(1) What is a dividend and what is the difference between cash dividends and stock dividends? What does it mean when shares of stock are outstanding? (2) Please explain what is meant by the terms “Date of Declaration,” “Date of Record,” and “Date of Payment” when referring to cash dividends. (3) What type of account is the “Cash Dividends” account? (4) On March 15, the board of directors of Beer Incorporated declared a $0.20 per-share dividend on its common stock...

Financial Accounting • Describe and explain the difference between a cash dividend and a stock dividend....

Financial Accounting • Describe and explain the difference between a cash dividend and a stock dividend. What is the number of shares used when computing a dividend? (Review pages 576 to 581). Describe Discontinued Operations for financial statements. Provide a real-life business example for Discontinued Operations for financial statements. Explain how Discontinued Operations items affect the investor’s evaluation of the company’s performance. (Review pages 691 to 693). • “Describe” the Ch10 – debt to assets and times interest earned ratios...

The Board of Directors of Oriole Company is debating what type of dividend (or stock split)...

The Board of Directors of Oriole Company is debating what type of dividend (or stock split) to give its shareholders. The common stock is currently trading at $34 per share. The following is Oriole’s current stockholders’ equity: Common stock, $10 par $ 400,000 Additional paid in capital – common stock 800,000 Retained earnings 1,300,000 Assume the company chooses a cash dividend of $2.50 per share. Assume the company chooses a property dividend. This dividend will be paid using Oriole’s investment...

Question