Distribution to Shareholders and Capital Structure Decisions
A stock dividend is a stock that is given to shareholders instead of cash while stock
splitting is divisions made on shareholders’ stock in a bid to increase or decrease issued
shares by a company. As a stockholder in the company, I would prefer to settle for a two for
one split instead of a 100% stock dividend declaration. This is because, while the two for one
split negatively affect the price of a stock, it is able to multiple the stock by two as I end up
owning one more stock for every stock I owned earlier. This move would allow me to stand a
chance to have an increased value in the future when the company stock value rises. Also, the
stock would become more affordable to a wider group of interested buyers in case I choose to
sell them in the future instead of having to wait on the very abled buyers to buy the stocks
that would be expensive were they not split.
A stock dividend is a stock that is given to shareholders instead of cash while stock
splitting is divisions made on shareholders’ stock in a bid to increase or decrease issued
shares by a company. As a stockholder in the company, I would prefer to settle for a two for
one split instead of a 100% stock dividend declaration. This is because, while the two for one
split negatively affect the price of a stock, it is able to multiple the stock by two as I end up
owning one more stock for every stock I owned earlier. This move would allow me to stand a
chance to have an increased value in the future when the company stock value rises. Also, the
stock would become more affordable to a wider group of interested buyers in case I choose to
sell them in the future instead of having to wait on the very abled buyers to buy the stocks
that would be expensive were they not split.
