Stock Dividend

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DEFINITION of 'Stock Dividend'

A dividend payment made in the form of additional shares, rather than a cash payout.

Also known as a "scrip dividend."

INVESTOPEDIA EXPLAINS 'Stock Dividend'

Companies may decide to distribute stock to shareholders of record if the company's availability of liquid cash is in short supply. These distributions are generally acknowledged in the form of fractions paid per existing share. An example would be a company issuing a stock dividend of 0.05 shares for each single share held.

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