Stock Dividend

07/04/2010 08:13


 Dividends are of two types’ viz. cash dividends & stock dividends.

 Stock dividends means dividends are not paid in cash but are paid as additional shares to existing shareholders on a proportional basis.

 On company front, it does not affect cash account of the company. The company’s retained earnings are reduced by the value of stock dividend and the company increases its common stock & paid-up capital accounts.