reply to the students responce with 150 words with 1 reference What is the difference between a stock dividend and a stock split? A stock split is when a company issues at least two new shares for eve

reply to the students responce with 150 words with 1 reference

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

A stock split is when a company issues at least two new shares for every existing share an investor currently holds. A stock dividend is when a company uses the money that would be paid as a cash dividend to purchase additional common shares for the shareholder. Those companies that are wanting to grow will want to keep any cash they have to invest in the company, which is why stock dividend is issued.  When a company feels its stock is above the popular price range for their stock, the company will stock split (Ward, 2019).

Ward, A.  (2019). Difference Between Stock Dividend & Stock Split. retrieved from https://www.sapling.com/6570302/difference-stock-dividend-stock-split/