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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.
The first type of dividend that one may receive is the cash type which is actually the most common. When the board of directors would declare that they will declare dividends, they will be giving extra bonuses in the form of a cash payment to investors. There will be a date of declaration that will be stated there as well as a date of payment wherein an investor will receive his money.
The second kind that one should know about would be the stock dividends which are dividends that are given as shares and not cash. Of course just like the cash type, there would first have to be a declaration date and a payment date. Now one very crucial thing to know about would be that only those whose shares are common shares are entitled to receive these kinds of dividends.
Now one very good example that one can use would be when he would invest in the stock market. Now whenever one would invest in a public listed company, he would also be entitled to bonuses. Now instead of receiving cash, he would be receiving for example, twenty five percent or basically the agreed percentage of the stocks that he invested in.
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.
The fourth on the list are the scrip dividends. Now in the event that the company does not have that much cash on hand, they may actually offer a promissory note to pay dividends. Basically they are promising that they will pay an investor his dividends but at a later date.
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 basically, these are some of the kinds that one may have to know of. Now it is hard to further explain these kinds which is why it is good for one to attend seminars that would tackle this topic. In fact, there are a lot of seminars like these in the city of Florida which is the home of many investors and many small businesses.
The first type of dividend that one may receive is the cash type which is actually the most common. When the board of directors would declare that they will declare dividends, they will be giving extra bonuses in the form of a cash payment to investors. There will be a date of declaration that will be stated there as well as a date of payment wherein an investor will receive his money.
The second kind that one should know about would be the stock dividends which are dividends that are given as shares and not cash. Of course just like the cash type, there would first have to be a declaration date and a payment date. Now one very crucial thing to know about would be that only those whose shares are common shares are entitled to receive these kinds of dividends.
Now one very good example that one can use would be when he would invest in the stock market. Now whenever one would invest in a public listed company, he would also be entitled to bonuses. Now instead of receiving cash, he would be receiving for example, twenty five percent or basically the agreed percentage of the stocks that he invested in.
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.
The fourth on the list are the scrip dividends. Now in the event that the company does not have that much cash on hand, they may actually offer a promissory note to pay dividends. Basically they are promising that they will pay an investor his dividends but at a later date.
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 basically, these are some of the kinds that one may have to know of. Now it is hard to further explain these kinds which is why it is good for one to attend seminars that would tackle this topic. In fact, there are a lot of seminars like these in the city of Florida which is the home of many investors and many small businesses.
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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