A 10% stock dividend is when a company distributes additional shares of stock to its existing shareholders as a dividend.
When a company declares a 10% stock dividend on their Common Stock and the market price of the Common Stock is greater than the par value, it means that the company is distributing additional shares of stock to its existing shareholders as a dividend. This is a way for the company to reward its shareholders without making a direct cash payment.
For example, if you own 100 shares of a company and they declare a 10% stock dividend, you would receive an additional 10 shares.
This type of dividend is usually done when the market price of the stock is high, as it allows the company to distribute value to its shareholders without using up its cash reserves.