kim226

A periodic payment to shareholders in the form of additional shares of stock instead of cash is a:

A) dividend reinvestment plan

B) stock dividend

C) stock repurchase

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Stock dividends are dividends paid out in new shares of stock instead of cash. Unlike stock dividends, dividend reinvestment plans are at the discretion of individual shareholders. In the case of stock repurchases, the company is buying back shares so the number of shares in the investment public’s hands is declining.