Stock Dividend

A Stock Dividend is a payment made by a corporation to a shareholders, usually as a distribution of profits.

• Context:
  • It can range from being a Preferred Stock Dividend to being a Common Stock Dividend.
  • …
• Counter-Example(s):
  • a Retained Earning.
• See: Dividend Reinvestment Plan, Share Repurchase, Public Company, Special Dividend.

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References

2014

• (Wikipedia, 2014) ⇒ http://en.wikipedia.org/wiki/Dividend Retrieved:2014-10-19.
  • A dividend is a payment made by a corporation to its shareholders, usually as a distribution of profits. When a corporation earns a profit or surplus, it can either re-invest it in the business (called retained earnings), or it can distribute it to shareholders. A corporation may retain a portion of its earnings and pay the remainder as a dividend. Distribution to shareholders can be in cash (usually a deposit into a bank account) or, if the corporation has a dividend reinvestment plan, the amount can be paid by the issue of further shares or share repurchase. A dividend is allocated as a fixed amount per share, with shareholders receiving a dividend in proportion to their shareholding. For the joint stock company, paying dividends is not an expense; rather, it is the division of after tax profits among shareholders. Retained earnings (profits that have not been distributed as dividends) are shown in the shareholders' equity section on the company's balance sheet - the same as its issued share capital. Public companies usually pay dividends on a fixed schedule, but may declare a dividend at any time, sometimes called a special dividend to distinguish it from the fixed schedule dividends. Cooperatives, on the other hand, allocate dividends according to members' activity, so their dividends are often considered to be a pre-tax expense. The word "dividend" comes from the Latin word “dividendum” ("thing to be divided").

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