Credit: Or, if the stock dividend is declared as a certain number of shares per outstanding share (for example, "0.05 shares per outstanding share"), simply skip the step where you divide by 100.
Or, if the stock dividend is declared as a certain number of shares per outstanding share (for example, "0.05 shares per outstanding share"), simply skip the step where you divide by 100.
An example
Let's say a company declares a stock dividend of 0.05 shares per outstanding share, and there are 100 million total shares outstanding before the stock dividend is paid. A quick look at the balance sheet tells us that the stock's par value is $0.01 per share, so the stock dividend distributable that the company will list on its balance sheet can be calculated as follows:
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