Stock dividend


 

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Stock dividend

The 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 dividend

Payment 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 Matches

Selling dividends

Selling dividends

Inducing a prospective customer to buy shares in order to profit from a dividend scheduled in the near future.


Liquidating dividend

Liquidating dividend

Payment by a firm to its owners from capital rather than from earnings.


Dividend

Dividend

The 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 dividend

Unpaid dividend

A dividend which has been declared by a corporation but has not yet been paid.


Dividend trade roll or play

Dividend trade roll or play

Used 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 Suggestions

Dividend policy
Unpaid 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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