The Types Of Dividend Payments

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.

Number one on the list would be the most common type which is known as the cash dividend. Now the board of directors would probably want to give rewards to their investors in the form of cash which is known as the cash dividend. Now the two most important things to take note of here is that the basis of the amount is the principal investment and that there are two dates to remember namely the date of declaration and date of payment.

The second on the list would be stock dividends which are given in the form of shares. There would also be a declaration date and a payment date just like the type mentioned above. One of the most important things to remember with these kinds is that only those who hold common shares may be able to get these dividends.

Now to further illustrate, it would be best to take a look at an example. For instance a certain company X is a public listed company and a person has invested in it. He will be getting stock dividends of twenty five percent which is basically the amount of shares he will receive as dividends based on his principal investment.

Now other than that, there would also be the property dividends. Instead of monetary kinds, the board of directors may actually decide to give dividends in the form of property or assets instead. When they would give an investor these dividends, they will be recording it in its fair market value or simply market value and then if it appreciates, the investor will benefit.

Yet another kind would be the scrip dividends. This is usually issued whenever a company would want to issue dividends to its investors but do not have the funds at hand so they offer a promissory note that they will issue it at a certain date. It is pretty much something like an IOU.

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 for those who are willing to become investors, these are some things to know about. If one would want to have deeper knowledge of each, then it would be recommended that he try going for a seminar. If one would want to go for some really good seminars, then he might want to try visiting the city of Florida since there are many speakers there that specialize in this field.

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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