After the stock dividend is paid, the per share value of the stockholder's stock will remain the same as the value before the stock dividend and, thus, the market value of his or her total holdings in the firm will remain unchanged.

Question

Quizplus · Accepted Answer

After a stock dividend is paid, it increases the number of shares a stockholder owns but decreases the value per share proportionally, resulting in no change in the total market value of the stockholder's holdings in the firm. Therefore, the per share value of the stockholder's stock will decrease and, thus, the market value of his or her total holdings in the firm will remain unchanged.

After the Stock Dividend Is Paid, the Per Share Value