Stock dividends

Definition

Stock dividends are payments made by a corporation to its shareholders in the form of additional shares, rather than cash. These dividends are distributed based on the proportion of shares each shareholder already owns.

Related terms

Dividend yield: The dividend yield is a financial ratio that shows how much a company pays out in dividends each year relative to its stock price.

Retained earnings:

Retained earnings are the portion of net income that is not distributed to shareholders as dividends but is kept by the company for reinvestment in its core business or to pay debt.

Equity financing: Equity financing involves raising capital through the sale of shares in a company, offering ownership interests to investors