A payment made by a firm to its owners in the form of new shares of stock is called a _____ dividend.

Question

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A payment made in the form of new shares of stock is known as a stock dividend. This is different from a cash dividend, which is a payment made in cash to shareholders. A stock dividend does not involve any cash leaving the firm's accounts, and instead, the firm issues new shares to its shareholders. This can be seen as a way for the firm to reward its shareholders without using up its cash reserves or taking on additional debt.

A Payment Made by a Firm to Its Owners in the Form