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An IOU from a publicly-traded company that is short on cash. Such a company pays dividends in scrip until it resolves its liquidity problems.
A dividend that is paid in stock or bonds rather than cash. A stock dividend may be declared when the company is cash poor and cannot afford a dividend otherwise. They are generally not considered desirable because one must pay capital gainstax on stock dividends, even though there is no cash gain for the shareholder. It is also called a scrip dividend. See also: Payment-in-kind bond.