Question

(b) Explain how a large stock dividend differs from a small stock dividend.

Answer 1

When a company issues stock dividends, it is usually expressed as a percentage of the total number of outstanding shares. Stock dividends less than 25% of outstanding shares are considered minor stock dividends. Anything over 25% is considered a large stock dividend.

Outstanding shares are all shares of a company authorized, issued, purchased or held by investors. These are distinguished from treasury shares, which do not represent exercisable rights as they are held by the company itself.

Outstanding stock refers to stock in a company currently held by all shareholders, including blocks of stock held by institutional investors and restricted stock held by officers and insiders of the company. increase. Shares outstanding are reported under the heading "Share Capital" on the company's balance sheet.

Shares Outstanding is the total number of shares issued by the company. Issued shares do not include shares with shareholders, ie shares repurchased by H. Company. Therefore, subtracting treasury shares from shares outstanding gives the number of shares outstanding. Issued shares include treasury stock.

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