Canadian Securities Course (CSC) Level 1 Practice Exam 2025 – All-In-One Guide to Master Your Exam Prep!

Image Description

Question: 1 / 400

What is the difference between cash dividends and stock dividends?

Cash dividends are paid in stocks, stock dividends are in cash

Cash dividends offer voting rights, stock dividends do not

Cash dividends are in cash, stock dividends are in additional stock

The distinction between cash dividends and stock dividends lies in their form of distribution to shareholders. Cash dividends are payments made in cash to shareholders, representing a portion of a company's earnings. This means that investors receive actual cash that they can use or reinvest as they see fit. On the other hand, stock dividends are issued in the form of additional shares of stock. This increases the number of shares held by existing shareholders but does not provide immediate cash liquidity.

Understanding this difference is key for investors in assessing how a company is distributing its profits and the implications for their investment strategy. Cash dividends provide immediate monetary benefit, while stock dividends reflect a strategy of reinvesting earnings back into the company.

Get further explanation with Examzify DeepDiveBeta

Cash dividends are not paid regularly, stock dividends are

Next Question

Report this question

Download Canadian Securities Course (CSC) Level 1 Practice Exam PDF Study Guide
Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy