web site research

web site research - . .,ratherthancash,thereusuallyare...

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dividend   paid  as additional  shares  of  stock  rather than as  cash . If dividends paid are in the  form  of cash,  those dividends are  taxable . When a  company   issues  a stock dividend, rather than cash, there usually are  not  tax  consequences until the shares are  sold . stock split - stock split  which reduces the number of  outstanding shares  and increases the per-share  price  proportionately. This is usually an attempt by a  company  to disguise a falling  stock  price, since the  actual  market capitalization  of the stock does not  change  at all. For example, if a company  declares  a one- for-ten reverese  split , then a  person  who previously  held  20  shares  valued by the  market  at $1 each will then  have 2 shares  worth  $10 each. A reverse  stock split  reduces the number of shares and increases the share price proportionately.  For example, if you own 10,000 shares of a company and it declares a one for ten reverse split,  you will own a total of 1,000 shares after the split. A reverse stock split has no effect on the value  of what shareholders own. Companies often split their stock when they believe the price of their  stock is too low to attract investors to buy their stock. Some reverse stock splits cause small  shareholders to be "cashed out" so that they no longer own the company’s shares.  A company’s board of directors may declare a reverse stock split without shareholder approval. 
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This note was uploaded on 01/27/2010 for the course ACCT 230 taught by Professor Yates during the Spring '09 term at Arizona.

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web site research - . .,ratherthancash,thereusuallyare...

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