Asked by Morgan Whittle on May 12, 2024
Verified
A stock dividend is sometimes undertaken by a firm that wishes to make its stock price more appealing to the average investor.
Stock Dividend
A payment made to shareholders in the form of additional shares rather than cash.
Average Investor
Typically refers to a non-professional or retail investor who participates in the markets but may not have extensive knowledge or resources.
Stock Price
The cost of purchasing a single share of a particular stock, representing the market's valuation of a company at any given time.
- Apprehend the differing approaches to dividends and their impacts.
- Perceive the factors steering dividend policy preferences among individual and institutional investors.
Verified Answer
VC
Vikram ChauhanMay 18, 2024
Final Answer :
True
Explanation :
A stock dividend does not change the value of the company but increases the number of shares outstanding, which can lead to a lower price per share, making the stock more appealing to the average investor by improving its affordability.
Learning Objectives
- Apprehend the differing approaches to dividends and their impacts.
- Perceive the factors steering dividend policy preferences among individual and institutional investors.