ACC 230 Week 4 Assignment Web Sites Search

ACC 230 Week 4 Assignment Web Sites Search - A dividend...

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A 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 - A 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. Although the SEC has authority over a broad range of corporate activity, state corporate law and a company s articles of incorporation and by laws govern reverse stock splits. From time to time, companies will want to change the amount of shares available in their
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This note was uploaded on 01/24/2012 for the course ACC 220 ACC 220 taught by Professor Black during the Spring '11 term at University of Phoenix.

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ACC 230 Week 4 Assignment Web Sites Search - A dividend...

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