When it comes to investing money in stock market, we might be familiar with the dividend. You might be familiar term of dividend. Well, we all have already agreed with the dividend is a profit that is shared with to the share holders. But, most of you might not know what types of dividends are. Whenever you want to invest the money on the stock exchange, you can find best online stock brokers on our website. There are several types of dividends that can be paid to shareholders, depending on the position and the ability of the company:
Cash dividend is the dividend paid in cash. In general, preferred cash dividend by the shareholders and the company used more often when compared to other types of dividends.
– Stock Dividend
Payment of stock dividend must also suggested the existence of profits or surplus available, with the payment of the stock dividend is the number of shares outstanding increased, but the payment of stock dividends will not change the company’s liquidity position because it is paid by the company is not part of the company’s cash flow.
– Property dividend (dividend goods). Property dividend is the dividend paid in the form of goods (assets other than cash). Property dividend distributed this should be the items that can be divided or homogeneous parts and delivery thereof to the shareholders will not disrupt the continuity of the company.
Scrip dividend is the dividend paid in the form of a letter (scrip) debt pledge. The company will pay a certain amount and on certain time, in accordance with those contained in the scrip. This form of payment would cause the company to have short-term debt to the holders of scrip.
– Liquidating dividend.
Liquidating dividend is a dividend based on the company’s capital reduction, not based on corporate profits.
By knowing the dividend, you will find the best way to be the successful investors. Please contact best online stock brokers if you need the further step of investing your money on the stock market.