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Finance Glossary

Just call us Bond. Amortized bond.

Over 700 finance terms, Shmooped to perfection.

Stock Dividend


The company might decide that it can put its extra cash to better use than paying it as a dividend, so it might instead decide to give the shareholders a stock bonus. Stock dividends don't have any effect on the shareholders' overall wealth. Yes, they own more stock, but the pie hasn't gotten larger; all that happened with the stock dividend is that there are more (and thinner) slices in the pie.