Stock Dividend

Legal Definition and Related Resources of Stock Dividend

Meaning of Stock Dividend

A stock dividend is stock distributed to those already holding stock by way of dividend upon their then holdings. A mode of distribution of accumulated profits in the shape of new stock instead of cash dividend , by increasing the number of shares held by the stockholders and thereby diminishing the value of each share but leaving the aggregate value of all his stock substantially the same. Stock dividends are one method of capitalizing the accumulated profits of a corporation ; or each surplus may be retained, and kept available for distribution in money or in kind. See Eisner v Macomber, 252 U.S. 189,40 S. Ct. 189, 64 L. Ed. 521.

Financial Definition of Stock Dividend

Payment of a corporate dividend in the form of stock rather than cash. The stock dividend may be additional shares in the company, or it may be shares in a subsidiary being spun off to shareholders. Stock dividends are often used to conserve cash needed to operate the business. Unlike a cash dividend, stock dividends are not taxed until sold.

Legal Definition of Stock Dividend

A dividend paid in securities rather than in cash. The dividend may be additional shares of the issuing company, or in shares of another company (usually a subsidiary) held by the company.

Related Entries of Stock Dividend in the Encyclopedia of Law Project

Browse or run a search for Stock Dividend in the American Encyclopedia of Law, the Asian Encyclopedia of Law, the European Encyclopedia of Law, the UK Encyclopedia of Law or the Latin American and Spanish Encyclopedia of Law.

Stock Dividend in Historical Law

You might be interested in the historical meaning of this term. Browse or search for Stock Dividend in Historical Law in the Encyclopedia of Law.

Legal Abbreviations and Acronyms

Search for legal acronyms and/or abbreviations containing Stock Dividend in the Legal Abbreviations and Acronyms Dictionary.

Related Legal Terms

You might be also interested in these legal terms:

United States Tax Concept of Stock Dividend

A corporate distribution of additional stock by a company to its shareholders.


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