Types of Dividend

Let's today to know something about Dividend...... A dividend is an extra income to dividend holder which totally tax-free in hands of Receiver which is considered the source of income.

1. By:- eFinanceManagement.com Types of Dividend

2. Contents Meaning of Dividend Types of Dividend

3. A dividend is the share of profits and retained earnings a company pays out to its shareholders. When a company generates a profit and accumulates retained earnings, those earnings can be either reinvested in the business or paid out to shareholders as a dividend. The annual dividend per share divided by the share price is the dividend yield. A share of the after-tax profit of a company, distributed to its shareholders according to the number and class of shares held by them. Smaller companies typically distribute dividends at the end of an accounting year, whereas larger, publicly held companies usually distribute it every quarter. The amount and timing of the dividend is decided by the board of directors, who also determine whether it is paid out of current earnings or the past earnings kept as reserve. Meaning of dividend

4. 1.Cash Dividend :- This is the most common type of dividend under which there is the actual payment of the cash by the company to its shareholders directly. Generally, the shareholder’s payment is done electronically but the same may be given in the form of cash or check . 2.Stock Dividend:- This is the type of dividend under which the company issues the common stock to the present common shareholders without taking any form of consideration. The treatment of the stock dividend depends on the percentage of an issue with respect to the number of the total previous share issue.  Different Types of Dividend

5. 3.Property Dividend:- Rather than giving a cash dividend or stock dividend to the investors, the company may give a non-monetary dividend. The company, in that case, has to record the distribution of non-monetary dividend at distributed asset’s fair market value. In case the fair market value of the assets distributed is different from the book value of assets then the company has to record the variance in form of the gain or loss as applicable in the case . 4.Scrip Dividend:- This is the type of dividend under which the Company issues the scrip dividend in a case as per the situation it is prevailing that in near future company might not have sufficient funds for issuing the dividends. Thus this type of dividend is a promissory note to pay  the shareholders of the company at the later date. This scrip dividend creates the note payable which may include interest or may not include. Continue…

6. 5.Liquidating Dividend:- This type of dividend is where the originally contributed capital is returned back to the shareholders mainly at the time of shutting down of the business . 6.Bond Dividend:- The Bond Dividends are similar to the scrip dividends, but the only difference is that they carry longer maturity period and bears interest . As in scrip dividends, dividends are not paid immediately in bond-dividends; instead company promises to pay dividends at future date and to that effect issues bonds to stockholders in place of cash. The purpose of both bond and scrip dividends is alike which postpone of dividend payment. Continue…

7. 7.Special Dividend:- A special dividend is one that’s paid outside of a company regular policy (i.e., quarterly, annual, etc.). It is usually the result of an excess cash build up . To know more about it click on the link given below… https://efinancemanagement.com/?s=types+of+dividend Thank You Continue…