When a company issues to its shareholders some shares of another corporation's stock that currently are held as an investment, the company is issuing a stock dividend.

Question

Quizplus · Accepted Answer

When a company issues to its shareholders some shares of another corporation's stock that it holds as an investment, it is conducting a distribution of property dividends, not issuing a stock dividend. A stock dividend involves issuing additional shares of the company's own stock to shareholders.

When a Company Issues to Its Shareholders Some Shares of Another