What are stock dividends? Algorithms are very different from cash dividends.

Stock dividends refer to a company giving shares directly to its shareholders instead of cash. This is completely different from cash dividends.

What are stock dividends?

The company made money but didn't want to take out cash. So they gave stocks instead. This way, the company's funds remain in their pocket. A pretty smart move.

How to Calculate Stock Dividends

It is generally calculated in units of 10 shares. It's very simple:

Divide your shares by 10, then multiply by the stock distribution ratio.

For example:

• You have 1000 shares
• The company says that for every 10 shares, 0.5 shares will be given.
• Calculation: 1000÷10×0.5=50 shares
• Good, you got 50 shares for free.

Another algorithm seems to be more complex: Annual net income minus changes in retained earnings equals total dividends.

Stock Dividends vs Cash Dividends

The advantages of stock dividends are:

• The company retains money to run business.
• Long-term holding may result in more powerful compound effects.
• The number of shares has increased, which feels a bit nice.

The amazing thing about cash dividends:

• Money available immediately, super practical
• The shareholding ratio will not be diluted.
• See returns immediately, no waiting required.

Ways to Affect All Parties

The company side: the capital has increased, and the money is still there.

As for stock prices: they will go ex-dividend, and the price usually adjusts accordingly.

Investor: The number of stocks has increased, but the total value should theoretically be about the same.

It seems that in 2025, many companies, especially new ones looking to take off, still prefer to issue stock dividends. This not only prevents shareholders from being too disappointed but also allows them to hold onto their wallets. As an investor, you need to think clearly about whether you want cash or more stocks. It completely depends on personal needs and strategies.