Which is the main difference between a stock split and a stock dividend?
A) A stock dividend increases the number of shares issued.
B) A stock dividend requires no cash outlay on the part of the company.
C) A stock dividend reduces the amount of Retained earnings in a company.
D) A stock dividend makes no change in the amount of authorized shares of a company.

Question

Quizplus · Accepted Answer

A stock dividend involves distributing additional shares to shareholders, which reduces the retained earnings account as the value of the dividend is transferred from retained earnings to common stock.

Which Is the Main Difference Between a Stock Split and a Stock