Ask Experts Questions for FREE Help !
Ask
    linkezzi's Avatar
    linkezzi Posts: 1, Reputation: 1
    New Member
     
    #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: 12,131, Reputation: 1307
    Expert
     
    #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.

Not your question? Ask your question View similar questions

 

Question Tools Search this Question
Search this Question:

Advanced Search

Add your answer here.


Check out some similar questions!

Declared a 3% stock dividend on common stock, to be capitalized at the market price o [ 0 Answers ]

http://college.cengage.com/nextbook/shared/accounting/warren_9781133952428/images/9781133952428-1470-t3.png?token=64C31C0E09181974AEECC3BE1DFB8F2F9C52CD6388C7F01B3926A1BB3C12FFC598C3B4AAEC57BAE378AF37FDED63F7CB ...

Accounting for treasury stock used in stock dividend [ 1 Answers ]

How do I account for treasury stock use in a stock dividend for preferred stock? What would the journal entry by? I don't believe I should debit retained earnings for this transaction, but I'm not sure what account to debit. Please Help

Calculating Preferred Stock and Common Stock Dividend [ 1 Answers ]

I want help understanding calculating dividends on preferred stock, here is the question: Golf-Easy Company has 10,000 shares of 3% preferred stock of $50 par and 25,000 shares of $100 par common stock. The following amounts were distributed as dividends: Year 1 $40,000 Year 2 ...

How to calculate Stock dividend shares and cash dividend amounts? [ 1 Answers ]

I owe 600 shares common stock , I currently received cash dividend of .42 per share a year. A 5% stock dividend, was declared, how many shares of coomon stock would I receive as a dividend?

Stock Split and Stock Dividend Differentiated [ 2 Answers ]

What are the differences between the accounting and securities market between the 2 methods of increasing the number of shares outstanding. The 2 methods are stock splits and stock dividends.


View more questions Search