stock dividend

stock dividend
A dividend paid by a corporation in stock of the corporation or in stock which the corporation holds in another corporation. Liebman v Auto. Strop Co. 241 NY 427, 150 NE 505. A corporate dividend payable in stock instead of cash, the declaration of which involves the creation and issuing of new stock to be distributed pro rata to the shareholders as evidence of the contemporaneous transfer of an equivalent amount of the surplus earnings or profits to the capital fund of the corporation. 19 Am J2d Corp § 812. An increase in the number of shares, the increased number representing the same property that was represented by the smaller number of shares. Booth v Gross K. & Co. 30 NM 465, 238 P 829, 41 ALR 868. Far from being a realization of profits of the stockholder, such a dividend tends rather to postpone such realization, in that the fund represented by the new stock has been transferred from surplus to capital, and is no longer available for actual distribution. Eisner v Macomber, 252 US 189, 64 L Ed 521,40 S Ct 189. As to what constitutes a stock dividend under the rules governing allocation of stock dividends between income and principal in a trust estate. See Anno: 44 ALR2d 1297.

Ballentine's law dictionary. . 1998.

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  • stock dividend — n. 1. a dividend in the form of shares of stock 2. the payment of such a dividend …   English World dictionary

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  • stock dividend — Finance. 1. a form of dividend collected by a stockholder in extra shares of the corporation s stock rather than in cash. 2. the stock received in such a dividend. [1900 05] * * * …   Universalium

  • stock dividend — / stɒk ˌdɪvɪdend/ noun US a dividend in the form of stock (i.e. a bonus issue of shares) …   Dictionary of banking and finance

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