Final answer:
A small stock dividend is a distribution of additional shares of stock to existing shareholders.
Step-by-step explanation:
A small stock dividend is a distribution of additional shares of stock to existing shareholders. It is usually expressed as a percentage of the individual's current holdings.
For example, if a company announces a 5% small stock dividend and a shareholder owns 100 shares, they will receive an additional 5 shares.
Small stock dividends are usually issued by companies that want to reward their shareholders while conserving cash, as issuing new shares does not require a direct payment of cash.