Response option 1 dividends are a way for a company

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Chapter 9 / Exercise 8
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Response Option 1 Dividends are a way for a company to reward you for investing money into the business. Cash dividends are paid for each share of stock you own in a company. Many companies will issue a cash dividend to indicate the firm is performing well and to attract new investors. Many companies pay dividends in stock so you can avoid paying any taxes until the stock is actually sold. In most cases you will receive a specific number of extra shares in the company based on the amount you already own. Property dividends are generally issued by companies that are having financial troubles but still wish to reward shareholders for their investment. A firm experiencing difficulty raising cash may issue a scrip dividend instead of paying money to shareholders. Companies that are not meeting expectations and are viewed by its officials as failing will issue liquidating dividends to shareholders as a way of paying them back for their investment I'd prefer the cash dividends because stock dividends tend to cause the price of the company stock to decline since more shares are being issued to people already holding shares. Response Option 2 There are four different types of dividends a corporation may issue. The four different types are the following: 1. Cash dividend, which is a method for a company to pay the stockholders for their shares with cash 2. Property dividend, which is an alternative to cash or stock paid to stockholders in the form of assets from the issuing corporation
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New Perspectives Microsoft Office 365 & Excel 2019 Comprehensive
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Chapter 9 / Exercise 8
New Perspectives Microsoft Office 365 & Excel 2019 Comprehensive
Carey/Parsons
Expert Verified
3. Scrip dividend, which is a legal note ensuring stock in the payment of cash. 4. Stock dividend which is a method for a company to pay the stockholders for their shares in stock Companies have the right to decide on a predate as to when to pay out the dividends. They may predate when they are going to pay out their dividends for a number of reasons such as: to increase the value of stock, to receive the initial money invested, or to finance a project. I would personally prefer a cash dividend since receiving a stock dividend may cause the market value of the stock to decrease. Discussion Question 3: Why do corporations buy back their own stock? What does it tell you about the corporation? What effect does the purchase have on the price of a company’s stock? Response Option 1 A stock buyback which is also known as a "share repurchase", is a company's buying back its shares from the marketplace. You can think of a buyback as a company investing in itself, or using its cash to buy its own shares. The idea is simple: because a company can't act as its own shareholder, the company absorbs repurchased shares, and the number of outstanding shares on the market is reduced. When this happens, the relative ownership stake of each investor increases because there are fewer shares, or claims, on the earnings of the company. If there is no news forthcoming and the share price is falling, the company doesn't have a way to increase demand.

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