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Finance Mock Interview

Question 15 of 32 for our Finance Mock Interview

Finance was updated by on June 13th, 2018. Learn more here.

Question 15 of 32

What is a Stock Split and Stock Dividend?

This question is simply asking for the definition in your own words and give an example. Keep it clear and concise, along with the example.

Here are a few ways to start off the answer:
1. A stock split is when a company splits its stock into 2 or more pieces. For example a 2 for 1 split. I have not worked in a company where there has been a stock split, but an example is....

2. A stock split is when a company splits its stock into 2 or more pieces. For example a 2 for 1 split. Since, I have just graduated from college, an example and scenario studied in my academic class is....

3. A stock dividend occurs when the company uses the amount of money that would be paid as a cash dividend to purchase additional common shares for the shareholder. In my experience, a company chose to split their stock because....

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How to Answer: What is a Stock Split and Stock Dividend?

Advice and answer examples written specifically for a Finance job interview.

  • 15. What is a Stock Split and Stock Dividend?

      How to Answer

      This question is simply asking for the definition in your own words and give an example. Keep it clear and concise, along with the example.

      Here are a few ways to start off the answer:
      1. A stock split is when a company splits its stock into 2 or more pieces. For example a 2 for 1 split. I have not worked in a company where there has been a stock split, but an example is....

      2. A stock split is when a company splits its stock into 2 or more pieces. For example a 2 for 1 split. Since, I have just graduated from college, an example and scenario studied in my academic class is....

      3. A stock dividend occurs when the company uses the amount of money that would be paid as a cash dividend to purchase additional common shares for the shareholder. In my experience, a company chose to split their stock because....

      Written by Bobbi Witt on June 18th, 2018

      Entry Level

      "A stock split is when a company splits its stock into 2 or more pieces. For example a 2 for 1 split. A company splits its stock for various reasons. One of the reasons is to make the stock available for the investors who invest in the stock of the companies which are inexpensive. The probability of growth for those stocks also increases. Stock Dividend is when the company distributes additional shares in lieu of cash as dividends."

      Written by Bobbi Witt

      Experience

      "A stock dividend occurs when the company uses the amount of money that would be paid as a cash dividend to purchase additional common shares for the shareholder. A stock split happens when a company issues two or more new shares for every existing share an investor holds. When an investor considers purchasing stock that has issued a stock dividend or that has been split, the investor needs to consider whether the company's goals in issuing a stock dividend or making a stock split match the investor's goals for wanting to invest in the company. If the investor's goals and the company's goals are incompatible, the investor should consider investing in another company. Companies that are pursuing growth will want to keep any cash they have to invest in the company. In this case, a stock dividend is issued.

      A stock split occurs when a company feels its stock is above the popular price range for their stock. The company uses the split to bring the stock price into the desired range."

      Written by Bobbi Witt