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Stock dividend |
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Stock dividendThe payment of a dividend to shareholders in the form of stock instead of cash. If a company declares a 5% stock dividend, a shareholder with 1,000 shares will receive an additional 50 shares. Known as a scrip dividend in the UK.Stock dividendPayment of a corporate dividend in the form of stock rather than cash. The stock dividend may be additional shares in the company, or it may be shares in a subsidiary being spun off to shareholders. Stock dividends are often used to conserve cash needed to operate the business. Unlike a cash dividend, stock dividends are not taxed until sold.Stock dividend Similar MatchesSelling dividendsSelling dividendsInducing a prospective customer to buy shares in order to profit from a dividend scheduled in the near future. Liquidating dividendLiquidating dividendPayment by a firm to its owners from capital rather than from earnings. DividendDividendThe distribution of part of a company's earnings to shareholders, usually twice a year in the form of a main dividend and an interim dividend.Normally, the dividend is expressed on a 'per share' basis, for instance - 3p per share. This makes it easy to see how much of the company's profits are being paid out, and how much are being retained by the company to plough back into the business. So a company that has earnings per share in the year of 6p, and pays out 3p per share as a dividend, is passing half of its profits on to shareholders and retaining the other half.Directors of a company have discretion as to how much of a dividend to declare, and they don't have to pay a dividend at all. Indeed , for young growth companies making no profits dividends are not generally expected.When they are expected, however, the City hates to be disappointed! Fund managers rely on big companies producing consistent dividends year after year, and wobetide the company that surprises the City by announcing a reduced or nil dividend.As a private investor, it is worth checking the dividend history of the company you invest in to see if it has produced a reliable stream over the years. If income is important to you (as opposed to capital growth), the dividend yield is vital information to you.Note that dividends are nearly always paid in cash, but they can also be in the form of stock (scrip dividend). Unpaid dividendUnpaid dividendA dividend which has been declared by a corporation but has not yet been paid. Dividend trade roll or playDividend trade roll or playUsed for listed equity securities. Method of buying and selling stocks around their ex-dividend dates so as to collect the dividend (which is 80% tax-exempt) offset by a fully-taxable capital loss. Predicated on the 80% current exemption that some corporations receive on dividend income. Further SuggestionsDividend policyUnpaid dividend cum dividend income dividend Discounted dividend model (DDM) Year end dividend dividend yield Ex dividend Special dividend final dividend Participating dividend Insurance dividend Dividend Discount Return Optional dividend Dividend Dividends received deduction Traditional view (of dividend policy) Omitted dividend passed dividend Interim dividend Dividend distribution Residual dividend approach Dividend in arrears Dow dividend theory Dividend clientele |
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