Question

why might investors prefer stock dividends over cash dividends? a.) if they are seeking flexibility b.) if they are seeking a predictable income stream c.) if they are seeking a stable share price d.) if they are seeking short-term liquidity

Answer 1

Investors prefer stock dividends over cash dividends if they are seeking short-term liquidity.

What is stock dividend?

An additional share of firm stock is given to the holders of common stock through a stock dividend. According to each shareholder's ownership stake in the firm, these dividends are dispersed equally to each. The share of their ownership in the corporation is maintained by such distributions. The dividend given to holders of common stock from the company's profits is known as a common stock dividend. The payout comes in the form of cash or shares, just like regular dividends. Particularly when the payout is a cash distribution that is effectively a liquidation, the law may be able to control the common stock dividend's size. These financial dividends could be given with the intention of deceiving creditors.

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