ABSTRACT : This study is an attempt to investigate into manager's motivations for issuing stock dividends from the Financial and Informational perspective. The research is divided into two sections: The first section investigates the management's motivations related to financial determinants. The most common reasons to issue stock dividends from the financial perspective is as follows: the desire to conserve cash in order to finance future expansions or to avoid cash dividends due to cash flow problems, signal optimistic managerial expectations about the future and move stock price into a better trading price range. The second section studies informational impacts of distributing stock dividends. Stock dividends are attention- triggering events there fore managers issue them to signal favourable information about firm value. Although stock dividends may be costly, extensive literature has reported that they are associated with a significant increase in stockholders wealth when issued by undervalued firms. Related articles have been reviewed in order to develop a thorough understanding of the topics discussed