Declare a stock dividend rather than a stock split
Course:- Accounting Basics
Reference No.:- EM13867097

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Activision Blizzard, Inc., reported the following in the notes to its financial statements.

Stock Split In July, the Board of Directors approved a two-for-one split of our outstanding common shares effected in the form of a stock dividend (the split). The split was paid September 5 to shareholders of record as of August 25. The par value of our common stock was maintained at the pre-split amount of $. 000001 per share.


1. Describe the effects that this transaction would have had on the company's financial statements. Assume that 600 million shares were outstanding at the time of the transaction, trading at a stock price of $ 33.

2. Why might the board of directors have decided to declare a stock dividend rather than a stock split?

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