> But you argued that a stock dividend is also equivalent to a cash dividend. They are not equivalent, no. That's what I was trying to emphasize with the diffe

> But you argued that a stock dividend is also equivalent to a cash dividend. They are not equivalent, no. That's what I was trying to emphasize with the difference in choice available to the investor. > They never do stock splits in place of cash dividends, because splits have no effect on shareholders' wealth. Neither do cash dividends. You own $100 of a company worth $1000. The company issues a 5% dividend. The company is now worth $950. You now own $95 of the company and got a $5 dividend. Wealth unimpacted (disregarding tax and future changes in the company's valuation of course).