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What are the different types of dividends corporations may issue? When should a corporation pay dividends?
Weegy: this are types of dividends: 1. Cash dividends are paid for each share of stock you own in a company. 2. Stock- Many companies pay dividends in stock so you can avoid paying any taxes until the stock is actually sold. 3. [ Property dividends are generally issued by companies that are having financial troubles but still wish to reward shareholders for their investment. 4. Scrip dividends are similar to you receiving a share of stock as payment from the company, but can be in the form of a promissory note assuring you payment of stock at a later time. 5. Liquidating-Companies that are not meeting expectations and are viewed by its officials as failing will issue liquidating dividends to shareholders as a way of paying them back for their investment. In the days of falling stock prices, Board of Directors will often begin to pay dividends to help stabilize the company’s stock. Many investors consider these dividends as a sign of safety and financial conservatism (which they are in many cases). Dividends in and of themselves, however, do not necessarily make the company a better investment. Companies that earn high returns on equity, have little or no debt, and large room to expand in their current industry would best serve their shareholders by paying no dividends. Instead, they should opt to reinvest all of the company’s available resources into growing the value of the underlying business. The shareholders will be rewarded through appreciation in the stock price. ] (More)
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Expert Answered
Asked 11/11/2012 11:07:51 PM
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Why do corporations buy back their own stock?
Weegy: To keep controlling interest in the company and not in someone else's hands.There is a second reason as well. If they are sitting on cash and think the stock is under-valued, they will invest in their own company. This does two things. [ First it props up the price by increasing the buy side demand. Second, it provides them the opportunity to enjoy a gain in the exchange when they put those share back into the market at a higher price. It also helps increase the Earning Per Share EPS, when earnings come out they put them into a per share basis. When companies buy shares they are no longer considered outstanding, so the same amount of money is divided among less shares. ] User: What does it tell you about the corporation? Weegy: Please clarify what d you mean about your question? User: Why do corporations buy back their own stock? What does it tell you about the corporation? Weegy: When a company announces a stock buyback or repurchase, it’s time to take a close look at what’s behind the action. This financial maneuver can be good news for shareholders or a smokescreen to cover pitiful financial ratios. [ The company wants to purchase outstanding shares of its stock, that is shares held by the public outside of its control. It can do this one of two ways: It can tender an offer to existing stockholders to buy up to a certain number of shares at a fixed price (usually at a premium over the current market price). There is a time limit on the offer. The other way is to buy the shares in the open market over a period. Companies often use this method when the stock’s price is especially depressed. ] (More)
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Asked 11/11/2012 11:17:45 PM
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