stock dividend is the process of splitting up shares into shares of shorter values and the shareholders get additional shares as dividend

stock dividend is the payment of dividend in the form of shares to its shareholders.

This will increase the amount of shares of the company. The company gives this type of choice when there is a shortage of cash for payout and to avoid the tax hassles when dividend is paid in cash.

A stock dividend is a pro-rata distribution of additional shares of a company’s stock to owners of the common stock. A company may opt for stock dividends for a number of reasons including inadequate cash on hand or a desire to lower the price of the stock on a per-share basis to prompt more trading and increase liquidity (i.e., how fast an investor can turn his holdings into cash). Why does lowering the price of the stock increase liquidity? On the whole, people are more likely to buy and sell a $50 stock than a $5,000 stock; this usually results in a large number of shares trading hands each day.