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6 May, 2015 - 17:10

Stock dividends are usually issued to holders of common stock, and are in the form of common stock. No cash or other corporate asset is distributed through stock dividends. A stock dividend alters the capital structure of a company by transferring accumulated retained earnings to paid-in capital. Stock dividends are commonly used by corporations which wish to use their funds for expansion purposes instead of cash dividends. The issuance of stock dividends does not effect asset, liability, or the total stockholders' equity balance of a company.