Question: Explain each of the Stock Dividend vs Stock Split Comparison Table The Basis of Comparison Stock Dividend Stock Split Meaning Dividend in the form of

Explain each of the Stock Dividend vs Stock Split Comparison Table

The Basis of Comparison

Stock Dividend

Stock Split

Meaning Dividend in the form of Equity Shares Division of Equity Shares
Purpose When there is no Cash Liquidity with the company To reduce the market price of Share
Issued from Issued from the Free Reserves Only increase In the no. of shares, no change in Value of Issued Shares.
Shares Additional Shares are allotted to existing shares Holder Already Held Shares are divided
Accounting Amount from Reserves is transferred to issued shares by passing Journal entry Whereas no Journal Entry is passed in
Type No type

Two types of Stock Split:

  1. Forward Stock Split
  2. Reverse Stock Split

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