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How does a stock dividend differ from a cash dividend for a shareholder?
a.A stock dividend pays additional shares and lowers the cost basis per share, while a cash dividend pays money
b.A stock dividend is always taxed immediately, while a cash dividend never is
c.A stock dividend reduces the number of shares owned
d.A stock dividend can only be paid by bond issuers
Giải thích
A stock dividend distributes additional shares rather than cash; the shareholder owns more shares, and the cost basis per share is reduced so total basis stays roughly the same. A cash dividend distributes money to shareholders.
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