What effect does a stock dividend have on the number of shares owned by a holder?

A stock dividend results in an increase in the number of shares owned by a shareholder. When a company issues a stock dividend, it distributes additional shares to existing shareholders based on the number of shares they already own. For example, if a company declares a 10% stock dividend, a shareholder who owns 100 shares will receive an additional 10 shares, bringing their total to 110 shares. This process effectively increases the holder's share count while the overall value of their investment remains the same because the equity is simply split among a larger number of shares.

In summary, stock dividends are a way for companies to reward their shareholders by giving them more shares, thereby increasing their overall stake in the company without changing the total investment value.