Question

similar to a stock split, a stock also distributes additional shares of stock to existing stockholders on a pro rata basis at no cost to the stockholders. (enter one word per blank.)

Answer 1

Similar to a stock split, a stock dividend also distributes additional shares of stock to existing stockholders on a pro rata basis at no cost to the stockholders.

A stock split is a decision made by the board of directors of a firm to issue more shares to present owners in order to increase the number of shares outstanding.

A stock split is a division of issued shares in a ratio determined by the company, whereas a stock dividend is a dividend paid in the form of extra shares. While in a stock split, already issued shares are divided in accordance with a predetermined ratio, a stock dividend gives stockholders extra shares.

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