Since stock dividends do not require payment in cash,their impact on a corporation's share price can be only positive (if there is an information effect)or neutral,but not negative.

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While it is true that stock dividends do not require payment in cash, their impact on a corporation's share price can be negative. This is because the increase in the number of shares outstanding due to the stock dividend can dilute the value of existing shares, leading to a decrease in share price. However, there may be other factors at play such as the information effect mentioned in the statement, which can mitigate or even outweigh the negative impact.

Since Stock Dividends Do Not Require Payment in Cash,their Impact