When a company pays out a dividend-in-kind, also called a stock dividend, it means that instead of paying out cash to shareholders, it distributes additional shares of the company's stock. This essentially means that existing shareholders will receive more shares without having to buy them. The immediate impact of a stock dividend on share price is usually negligible. Although the total number of shares increases, the value of each individual share decreases proportionally. So, while shareholders may have more shares, the overall value of their investment remains the same. In the long term, stock dividends can potentially have an effect on share price, by increasing the number of shares outstanding, it may signal to the market that the company has confidence in its future performance and is willing to share its profits with shareholders.