# How to Calculate Stock Dividends Distributable

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Most dividends are paid in the form of cash -- for example, a company might declare a quarterly dividend of \$0.50 per share. However, though it's less common, companies also have the option of declaring stock dividends. When paying a stock dividend, a company issues additional shares of stock proportional to existing investors' holdings.

Before these stock dividends are handed out, they're known as "stock dividends distributable" and are listed in the stockholders' equity section of the company's balance sheet.

Calculating stock dividends distributable
When a company declares a stock dividend, it may do so as a percentage of shares outstanding, such as a "10% stock dividend." The first step in calculating stock dividends distributable is to divide that percentage by 100 to convert it into a decimal. In our example, 10% would become 0.10.

Next, multiply the company's total outstanding shares by this decimal. You can find the number of outstanding shares in most stock quotes.

Finally, multiply this amount by the par value of the stock, which can usually be found in the stockholders' equity section of the balance sheet. This is typically a small amount, such as \$0.01, and it has no relation to the actual share price of the stock. Once you multiply these figures by one another, the result is the amount the company would list as stock dividends distributable.