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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