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Strategies & Market Trends : Value Investing
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To: Paul Senior who wrote (33817)3/17/2009 12:56:47 AM
From: Grommit  Read Replies (2) of 78753
 
You can think of a stock dividend as a combination cash dividend and a mandatory rights offering. They can make you buy the shares but they cannot make you keep them. You can sell the dividend shares and you will then have the dividend in cash.

The only issue is that as a stockholder, you may not want to see a rights offering at today's stock prices. If you feel that way, you have to keep the shares and sell something else to get your "cash dividend".

Does this make sense?
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