The Different Types Of Dividend Payments
| 04:11:00 |
Whenever a person would become a stockholder of a company, depending on what types of stocks he will be possessing, he will be entitled to dividends. Of course there are different kinds of dividends that one may receive based on his agreement with the company. Just to give one an idea, here are several types of dividend payments that he would have to take note of.
Now the first and most common kind would be cash dividends which are often given to those with common shares. Now if the directors of a company would want to give out cash dividends, they would first declare that they will be giving these bonuses and how much. After that, there will also be a date of payment which will be the date that the investor will actually receive it.
Another kind would be stock dividends which are the types that are not in the form of cash but in the form of shares of stock. Just like the cash dividends, there would be a declaration date as well as a date of payment wherein one would get his dividends. Now one very important thing to take note would be that only those who have common shares may avail of stock dividends.
Now one very good example that one can use would be when he would invest in the stock market. Now whenever one would invest in a public listed company, he would also be entitled to bonuses. Now instead of receiving cash, he would be receiving for example, twenty five percent or basically the agreed percentage of the stocks that he invested in.
The third on the list would be property dividends. Now instead of money types, the board of directors may want to give dividends that take the form of property instead. Now probably the most important thing to take note of here is that when it is handed over to the investor, it is always recorded in its fair market value.
Now there would also be the scrip dividends. Now these are usually given as IOUs in the event that the company has insufficient funds or money at hand. So the company would issue a promissory note to the investor on when the company will pay.
The last kind would be liquidating dividends which is wherein the board would return the principal amount invested by a shareholder in the form of dividends. This would usually happen if the business is already ready to close down and would still want to keep good ties with its investors. It is called liquidating dividends because the business is already in the process of liquidation.
So basically, these are the different kinds of dividends that one may avail of. Now if one would want to go deeper into this subject, he may actually go for a seminar on it. Many organizations, especially in Florida, would actually offer these seminars.
Now the first and most common kind would be cash dividends which are often given to those with common shares. Now if the directors of a company would want to give out cash dividends, they would first declare that they will be giving these bonuses and how much. After that, there will also be a date of payment which will be the date that the investor will actually receive it.
Another kind would be stock dividends which are the types that are not in the form of cash but in the form of shares of stock. Just like the cash dividends, there would be a declaration date as well as a date of payment wherein one would get his dividends. Now one very important thing to take note would be that only those who have common shares may avail of stock dividends.
Now one very good example that one can use would be when he would invest in the stock market. Now whenever one would invest in a public listed company, he would also be entitled to bonuses. Now instead of receiving cash, he would be receiving for example, twenty five percent or basically the agreed percentage of the stocks that he invested in.
The third on the list would be property dividends. Now instead of money types, the board of directors may want to give dividends that take the form of property instead. Now probably the most important thing to take note of here is that when it is handed over to the investor, it is always recorded in its fair market value.
Now there would also be the scrip dividends. Now these are usually given as IOUs in the event that the company has insufficient funds or money at hand. So the company would issue a promissory note to the investor on when the company will pay.
The last kind would be liquidating dividends which is wherein the board would return the principal amount invested by a shareholder in the form of dividends. This would usually happen if the business is already ready to close down and would still want to keep good ties with its investors. It is called liquidating dividends because the business is already in the process of liquidation.
So basically, these are the different kinds of dividends that one may avail of. Now if one would want to go deeper into this subject, he may actually go for a seminar on it. Many organizations, especially in Florida, would actually offer these seminars.
About the Author:
If you would to know more about the types of dividend payments available, check out this link to The Declaration of Dependence Dividends in the Twenty-First Century. To order the book, come to http://financial-economics.org now.
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