BUSINESS KNOWLEDGE || Get to know the forms/types of dividend for your company

Meaning of dividend
A dividend is a distribution of a party of earnings of the company or the payment from the company’s profit that made by the company to capital investors.
The dividend that can be issued as cash payments, shares of stock, or other properties as how the management and the board of directors prefers.
Dividend rates to shareholders depend upon the sum of profit made and the number of shares to which each member possess.

The forms and types of dividend are many and differentiated from one another, although they muchly allocated as fixed amount per share as cash, But there are other forms, some of them are such as following;

Cash Dividend
It is a type of dividend where by distribution of an organization profit to shareholders is paid in cash. It is a type of dividend that is most common compare to others.
The board of directors resolves to pay a certain dividend amount in cash to those investors holding stock in the company on the date of declaration.

Stock Dividend.
Are sometimes known as bonus Shares, it is a type of dividend issued by organizations that lack cash to distribute to its shareholders.
These organizations issue the common stock to the shareholders to keep them satisfied from what they invested.
In other words, shareholders get the additional shares in proportion to the shares already held by them

Property Dividend
This is the type of dividend where by an organization pays a non-monetary dividend to investors, rather than making a cash or stock payment.
The dividends are paid in the form of a property rather than in cash.

Scrip Dividend
It is a type of dividend applied the time when the company do not have sufficient funds to issue dividends in the near future.

Liquidating Dividend
This form of dividend applied when the board of directors wishes to return the capital originally contributed by shareholders as a dividend.
In other words, it is applicable when the board of directors decides to pay back the original capital contributed by the equity shareholders as dividends.