stock dividend

stock dividend A dividend in the form of more shares of stock. A 5% stock dividend means that a stockholder holding 100 shares would receive 5 additional shares of stock. Since all shareholders receive additional shares, each shareholder's percentage of ownership is unchanged. In theory the market value per share should drop since there are now 5% more shares outstanding and the company is exactly the same as before the stock dividend.

- Used to explain the concept in accounting and business contexts.
- Used when training staff or documenting procedures and policies.

- Example: Teams reference **stock dividend** when defining terms in manuals, policies, or training materials.

- Why it matters: Improves clarity and consistency across documentation and decision-making.