Share dividend意思

"Share dividend" is a term used in the context of investing and finance, specifically referring to the distribution of a company's profits to its shareholders. When a company earns a profit, it can choose to reinvest the money back into the business, pay down debt, or distribute a portion of the profits to its shareholders as dividends.

A dividend is a payment made by a company to its shareholders, usually as a cash payment or as additional shares of stock. Shareholders who own the company's stock are entitled to receive dividends if the company's board of directors declares a dividend payment. The amount of the dividend is typically proportional to the number of shares held by each shareholder.

When a company declares a share dividend, it means that it is issuing additional shares of stock to its existing shareholders, rather than paying out a cash dividend. A share dividend is also known as a stock dividend or a scrip dividend. The new shares are issued to shareholders in proportion to their current holdings, so shareholders who own more shares receive more of the new shares.

For example, if a company declares a 5% share dividend, and you own 100 shares of the company's stock, you would receive an additional 5 shares (100 shares x 5% = 5 shares). The total number of shares outstanding increases with a share dividend, but the company's market capitalization (total value of all outstanding shares) does not change, because the value of each individual share adjusts to reflect the increased number of shares outstanding.

Share dividends can be an attractive option for companies that want to distribute profits to their shareholders without paying taxes on the distribution, as is the case with cash dividends. However, shareholders who receive additional shares through a share dividend may eventually have to pay taxes on any capital gains if they sell their shares at a profit.