Whenever one would invest in a company and become a shareholder, most companies would actually want to give dividends to that investor so that he'll continue investing. For those who do not know what these are, basically they are extra bonuses that are given to these investors for being loyal. Now if one would want to know more, here are the six different types of dividend payments that one may encounter.
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 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 fifth and last kind would be the liquidating dividends which are often given by companies who are closing. Basically what the board would do is that they would be giving back the amount of the principal investment but in the form of dividends. This is done when the company is liquidating all of its assets before closing down which is the reason why the name is as such.
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 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 fifth and last kind would be the liquidating dividends which are often given by companies who are closing. Basically what the board would do is that they would be giving back the amount of the principal investment but in the form of dividends. This is done when the company is liquidating all of its assets before closing down which is the reason why the name is as such.
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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