Types of Dividends Not Paid in Cash | CFA® Level 1 Exam Preparation

Non-Cash Dividends

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Question

Which of the following types of dividends, are never paid out in the form of cash?

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A. B. C. D. E.

B

Stock dividends are dividends paid in the form of additional shares of stock rather than in cash. The total number of shares is increased, so earnings, dividends, and price per share all decline. Stock dividends that are used on a regular basis will keep the stock price more or less constrained, that is, within the optimal trading range.