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Define stock dividends and cash dividends. What is the difference between the two and which type...

Define stock dividends and cash dividends. What is the difference between the two and which type of dividends do you think is best? If you were considering purchasing stock in a company, would either of these practices make a difference in your choice of which stock to purchase?

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Answer #1

Cash dividend = a cash dividend is a payment made by the company out of its earnings to the investOrs in the form of cash.

Stock dividend = on the other hand is an increase in the amount of share of company with the new share being given to the shareholder .

Difference between cash dividend and stock dividend.

1) cash dividend when given by the company to the shareholder when the company huge liquidity of cash. Stock dividend when given by the company to the share shareholders short availability of liquidity of cash.

2)cash dividend doesnot increase the value of company. But stock dividend increase the value of company.

Stock dividend i think best it is increase value of company.

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