Answer to Question #64707 in Accounting for JAY

Question

Contrast the effects of a cash dividend and a stock dividend on a corporation's balance sheet. Which would you rather receive if you were a stockholder?

Answer 1

A cash dividend is a classic form of dividend payment. To pay dividends in such way it is necessary to order money in a bank if a company does not have them on its account. A stock dividend is when you can take your part of stockholders in such forms as: equipment, stocks, fixed assets, receivables and etс. In this case I would prefer a classic form of dividend payment, because in other form I will need money to sell fixed assets to receive cash.