Stock splits are ________ stock dividends due to the way they are treated for tax purposes.

Question

Quizplus · Accepted Answer

Stock splits are more popular than stock dividends primarily because they do not generate immediate tax consequences for the shareholder, unlike dividends which can be taxable income. In a stock split, the company increases the number of shares, reducing the price per share accordingly, but the total value of shares held by investors does not change, avoiding immediate taxation.

Stock Splits Are ________ Stock Dividends Due to the Way