View Here : How Do Stock Dividends Work
A dividend is a distribution of a portion of a company’s earnings, decided by the board of directors, to a class of its shareholders. Dividends can be issued as cash payments or as shares of stock* (Investopedia). Picking a stock which pays its stockholder an adequate dividend is vital for an investor who wants generate an income.
Stock Dividends. With each stockholder receiving a percentage of the additional shares and the market value of each share decreasing in value, each stockholder should end up with the same total market value as before the stock dividend. (If this reminds you of a stock split, you are very perceptive.