I know that if a company announces that there will be a 10% stock dividend payment it’s the equivalent of getting one extra share for every ten you won. What if you own less than 10 shares though? How can they pay a partial stock dividend?
I actually mean dividends paid in stock, not money.
They send you a check for the value of the dividend. Even if you owned more than 10 shares, you would receive a check for the value that was not an even number of shares.
I think there are many things wrong here. First, a dividend is not a percent but cents per share. Say the company pays a dividend of 1 cent per share. then you would get 10 cents. If you hold the shares with a custodian then the money will be deposited directly to that account on payment date. You do not get shares, that would be on a stock split. Hope this helps.
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I think they will send you a check for partial shares.
A lot of people, like those that may reinvest dividends in to the stock, will have an odd number of shares not divisible by 10. Technically "on paper" I think they issue you the partial share and then "sell" them for you. But all you will see is a check to the address of record.
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The type of stock dividend you are asking about is really a stock split, just not 2:1, it’s 1.1 for 1. If your dividend is not enough to exceed one share you will get cash instead. If the dividend is between an integral number of shares you will get the full shares and cash for the fractional shares (such as if you owned 21 shares, you’d get 2 shares plus cash for the .1 share dividend). If you own the stock in a dividend reinvestment plan where fractional shares are issued, you’ll be issued additional fractional shares. Hope this helps.
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They send you a check for the value of the dividend. Even if you owned more than 10 shares, you would receive a check for the value that was not an even number of shares.
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