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What is the Difference between a Stock Dividend and a Cash Dividend?




  • The difference is one is in cash and the actions of others! What usually happens is that they have assigned their dividends in cash and then you have a choice to buy shares at a low cost, in a trickle or voucher scheme. This has the effect of compounding dividends. The tax treatment is exactly the same. From the standpoint of the company is cheaper to issue more shares to maintain and money.
  • The dividends are dividends. You can take them in cash or, in some cases, you can have them automatically reinvested by purchasing additional shares.
  • Will be issued a stock dividend so we still could afford, but keep the money in the company. With stocks you own more and more of the company, but could gain or lose value over time, it's a risk you take. With cash, which essentially get what the stock is worth at the time of payment.

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