Property dividend a stockholder dividend paid in a

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Property Dividend- A stockholder dividend paid in a form other than cash, scrip, or the firm's own stock. Cash Dividend- A dividend paid in cash to a company's shareholders, normally out of the its current earnings or accumulated profits Debenture Dividend Bonus share or Stock dividends- A dividend payment made in the form of additional shares, rather than a cash payout. Optional Dividend- Dividend which the shareholder can choose to take as either cash or stock.
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Cash Dividend If the dividend is paid in the form of cash to the shareholders. Stock Dividend Stock dividend is paid in the form of the company stock due to raising of more finance. Cash is retained by the business concern. Stock dividend may be bonus issue. This issue is given only to the existing shareholders of the business concern.
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Bonus dividend Increases the paid up capital and Reduces retention of earnings. (does not affect the wealth of shareholders Eps and Mp will fall) Why? Issue bonus shares Bonus – shares- Bonus shares Converting free reserves in to Equity Free reserves Equity capital
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Bond Dividend also called as scrip dividend. If the company does not have sufficient funds to pay cash dividend, the company promises to pay the shareholder at a future specific date with the help of issue of bond or no
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Property Dividend Property dividends are paid in the form of some assets other than cash.
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Objectives of stock dividend Conservation of cash Lower rate of dividend Financing expansion programmes Transferring the formal ownership of surplus and reserves to the shareholders Enhanced prestige Widening share market True presentation of earning capacity
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TYPES OF DIVIDEND POLICIES Regular dividend policy Stable dividend policy Irregular dividend policy No dividend policy
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Regular Dividend Policy Dividend payable at the usual rate is called as regular dividend policy. Suitable to the small investors, retired persons and others.
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Stable dividend policy Payment of certain minimum amount of dividend regularly. Three forms Constant Dividend per share ( pays fixed amount per share as dividend) Constant payout ratio (dividend payout ratio = Dividend/Earnings) (Constant percentage of net earnings is paid) Stable rupee dividend plus extra dividend. (Minimum dividend per share + Extra dividend is paid in the years of Prosperity
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Irregular Dividend Policy When the companies are facing constraints of earnings and unsuccessful business operation, they may follow irregular dividend policy. It is one of the temporary arrangements to meet the financial problems
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No Dividend Policy Sometimes the company may follow no dividend policy because of its unfavourable working capital position of the amount required for future growth of the concerns
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Merits of Stock dividend To the company Maintenance of liquidity position Satisfaction of shareholders Economical issue of
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