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    linkezzi's Avatar
    linkezzi Posts: 1, Reputation: 1
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    #1

    Apr 15, 2014, 06:32 AM
    1.5 to 1 stock dividend
    One of my holdings has announced 1.5 to 1 stock dividend. I'm not sure what that means. It doesn't seem like dividend, it sounds like a split. Sort of. It is presented as such: "We have approved the stock dividend in an effort to increase liquidity in our stock. Stockholders of record will receive an additional 1.5 shares for every 1 share they own."

    Can someone explain this? Thanks!
    ebaines's Avatar
    ebaines Posts: 12,130, Reputation: 1307
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    #2

    Apr 15, 2014, 08:51 AM
    This is actually a 1.5:1 stock split - any time a stock dividend is declared that is greater than 25% it's considered a split. But the question is moot - in either case you end up with additional shares at a reduced cost basis per share. The company should include in its documentation that the "dividend" is not a taxable event.

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