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Q: What are the different types of dividends corporations may issue? When should a corporation pay dividends?
A: 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. ]
tumbler10|Points 70|
Asked 11/11/2012 11:35:35 PM
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