One of the main reasons for stock dividends is to continue dividends while retaining cash.

Question

Quizplus · Accepted Answer

When a company pays a stock dividend (instead of a cash dividend), it is able to continue paying dividends to its shareholders while retaining its cash for other purposes, such as investing in growth opportunities or paying off debt. This can be beneficial for investors who rely on regular dividend payments for income, as well as for the company itself, which can use its cash to fuel future growth.

One of the Main Reasons for Stock Dividends Is to Continue