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Canadian Securities Course (CSC) Practice Exam · Question

An investor owns shares of a company and receives additional shares instead of cash dividends. This is known as a:

A stock dividend is a dividend paid in the form of additional shares of stock rather than cash. This increases the number of shares outstanding but does not cha

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Question: An investor owns shares of a company and receives additional shares instead of cash dividends. This is known as a:

Answer options:

  • Stock split
  • Reverse stock split ✅ Stock dividend
  • Rights offering

Correct answer: Stock dividend

Explanation: A stock dividend is a dividend paid in the form of additional shares of stock rather than cash. This increases the number of shares outstanding but does not change the proportional ownership of the company.

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