Learn what a stock dividend is, how it changes share count, and why it
A stock dividend is a dividend paid in additional shares rather than in cash. Existing shareholders receive more shares in proportion to what they already own.
Because the company is issuing new shares instead of distributing cash, the total share count rises while cash stays inside the business. Each investor usually owns the same percentage of the company immediately after the stock dividend, but the per-share value adjusts because the same equity base is now spread across more shares.
This matters because a stock dividend changes share count, book values per share, and sometimes investor perception, even though it does not create new economic value by itself. Management may use it to conserve cash, signal confidence, or keep the stock price in a preferred range.