STOCK DIVIDENDS.

The article focuses on the controversy surrounding the policy of some companies in the United States to pay dividends in stock instead of cash. A stockholder might feel that he is increasing the wealth of a company by accepting his dividends in stock instead of cash since it is automatically reinvested in the company. The author looks at how stock dividends affect the share value of a company and what the actual return in value of a stock dividend is. To examine these ideas, he performs a study on the dividend payments of the North American Company.