A stock dividend does not impact the income of the company. It is accounted for entirely within the owners' equity section of the balance sheet.
A stock dividend does not affect the shareholders' wealth since there is no distribution of assets of the company and each individual shareholder's market value of their investment remains unchanged after the stock dividend.
A stock dividend increases the number of shares outstanding and this in turn will decrease earnings per share in the future since the profits of the company will need to be divided between more shares.
A stock dividend does not affect the size of the company.
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