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Home | Business | Public Company Types Of Dividends Companies offer three regular kinds of dividends as well as special forms of dividends 1.Cash Dividends: This is the most common and popular method of sharing a company’s profits. The company pays portion of profits to shareholders as dollar per share. However cash dividends are subject to double taxation in the US. This is a reason used by many companies to justify not paying dividends. The government taxes at a maximum rate of 15%. The company distributes dividends after the company has paid income tax and the government taxes the shareholders once they receive the dividends. 2.Stock Dividends: Companies pay stock dividends in the form of additional shares of the same company or its subsidiary corporation according to the proportion of the shares owned. 3.Property Dividends: Companies pay property dividends in the form of products or services provided by the corporation. These take the form of assets such as gold, silver, cocoa beans etc. distributed by companies. 4.Special Dividends: Companies offer special dividends rarely, such as when the company wins litigation and when the company sells a business or liquidation of investments. Some companies also offer special dividends when they have high amount of excess cash, in order to boost the market value of their stocks. Sometimes they document these special dividends as return of capital, meaning the company is returning a portion of the money invested by the shareholders. They call these dividends capital dividends, and these dividends are tax-free. Reinvested Dividends Shareholders can reinvest dividends received partially or totally in the company’s stock if the shareholder does not depend on the dividends to make ends meet. Shareholders accumulate wealth consistently this way and enrolling in a dividend reinvestment plan can make the whole process of reinvesting easier since everything is automated, thanks to the various types of software that have commendable features, making everything concerned with dividends just a mouse click away. From the convenience of your home you can find out the latest statistics about dividends and reinvestment options. Article Source: http://www.articlewheel.com
David Gass is President of Business Credit Services, Inc. His company publishes afree weekly e-newsletter on Small Business Consulting at their web site www.smallbusinessconsulting.com
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