Reference no: EM133116116

Q1A: Rephrase the following article so that there will be no plagiarism (excluding headings rephrasing).

A dividend is a portion of a company's profits delivered to shareholders as a return on their investment. The company's management must use profits to satisfy all stakeholders, but equity stockholders are given priority because they bear the most risk.

Explanation:

TYPES OF DIVIDENDS AND WHEN PAID TO INVESTORS.

Cash Dividends

The most common dividend is a cash dividend. Shareholders are paid in cash. The board announces the dividend payment on the declaration date. The dividends are paid to stockholders on the record date.. However, to pay cash dividends, the corporation must have positive retained earnings and sufficient cash. Preferred only when the cash is sufficient.

Bonus share

Also known as stock dividend. When a corporation has little operational cash but wants to keep investors pleased, they issue these. Each equity shareholder receives additional shares based on the amount of shares initially possessed. In this situation, the corporation keeps profits while the shareholder gets dividends. A cash-hungry investor can sell the investment on the secondary market.

Share repurchase

A corporation buys back its own shares from the market, reducing the number of outstanding shares. This is an alternative to paying dividends because cash is repaid to investors in another method.

Dividend Property

The corporation pays a property dividend in the form of assets. This equipment, inventory, vehicle, or other asset could be the asset. A property dividend must be reissued at fair value.