Company divides its existing shares into multiple shares are stock splits and divident are distribution of profit to its shareholders
Stock Dividends
A stock dividend does not involve cash. Rather, it is the distribution of more shares of the corporation's stock
Stock Splits
Stock splits occur when a company perceives that its stock price may be too high. Stock splits are usually done to increase the liquidity of the stock
no need to pay tax on that
Both were corporate actions, following are differences.
- The major difference between stock split and dividend is value, dividend is the value added to your investment whereas stock split doesn’t have any real value. Your Dollar or Rupee value remains the same in case of stock split.
- Dividend is the liability to the Company investors, whereas stock split is done by the company to increase the liquidity in stock.
Dividend is the portion of companies earnings distributed to all the shareholders of the company.
Stock split is the corporate action in which company divides its existing shares in to multiple shares. The price of stock also drops proportionately to the split.
For investors dividends are tax free, whether they received it by investing shares or mutual funds. But company has to pay the tax on behalf of investors, its called has Dividend Distribution Tax (DDT), i think its around 15% of the total dividend amount.
For investors dividends are tax free, whether they received it by investing shares or mutual funds. But company has to pay the tax on behalf of investors, its called has Dividend Distribution Tax (DDT), i think its around 15% of the total dividend amount.