FIN test2 - Ch17 Types of cash dividends o Regular cash...

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Ch17 Types of cash dividends o Regular cash dividend: cash payments made directly to stockholders, usually each quarter o Extra cash dividend: indication that the extra amount may not be repeated in the future (regular + extra) o Special cash dividend: similar to extra dividend, but definitely won’t be repeated o Liquidating dividend: some or all of the business has been sold Dividend payment o Declaration date: board declares the dividend and it becomes a liability of the firm o Ex-dividend date Occurs two business days before date of record If you buy stock on or after this date, you will not receive the dividend Stock price generally drops by about the amount of the dividend Increase stock price until dividend date, after that stock price falls by the amount of the dividend to original price (ex-dividend date) o Date of record: holders of record are determined and they will receive the dividend payment o Date of payment: checks are mailed Clientele effect o Some investors prefer low dividend (or high growth capital gain) payouts and will
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This note was uploaded on 10/13/2011 for the course MGT 101 taught by Professor Karen during the Spring '11 term at Missouri State University-Springfield.

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FIN test2 - Ch17 Types of cash dividends o Regular cash...

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