Does dividends by shares be counted on dividend payout ratio?

CFA Level II
#1

Generally, cash dividends are obvisiously counted on computing dividend payout ratio.

As stock dividends are basically a transfer from retained earnings to chartered capital. No decreases of cash are recognized.

So will dividends paid by shares are counted on the formula to compute dividend payout ratio.

All your comments are very welcome.

Thanks a bunch!

#2

Stock dividends aren’t really dividends, their name notwithstanding. They’re stock splits; e.g., a 10% stock dividend is really an 11:10 stock split.

Because they aren’t really dividends, they don’t affect the dividend payout ratio.