TYPES OF DIVIDENTS

PREMCHAND 12ME1E0020

Introduction

Dividents are classified into various forms.

Dividends paid in ordinary course of business are known as profit dividends

Dividends paid out of capital are known as liquidation business

Definition

A dividend is a distribution to shareholders out of profit or reserves available for the purpose----------Institute of charted accountant of India

On the basis of

On the basis of types of shares

Equity DividendPreference Dividend

Equity Dividend

Equity Dividend: Dividends paid on equity is called equity dividends

Preference Dividend: Dividends paid to the preference customer

ON THE BASIS OF MODE OF PAYMENT

CASH DIVIDEND

BONUS SHARE STOCK DIVIDENDS

SCRIP OR BAND DIVIDEND

PROPERTY DIVIDENDS

COMPOSITE DIVIDEND

ON THE BASIS OF MODE OF PAYMENT

CASH DIVIDEND: It is a methods of paying dividends. Payment of dividends in cash results in outflow of funds and reduces the company’s net worth where share holders get an operating to invest the cash in any manner by desire.These is why ordinary share holders perform the receive dividend in cashBONUS SHARE STOCK DIVIDENDS: Stock dividends means issue of bonus shares to the existing share holders. It company does not have liquid resources its is barrier to declare stock dividend.

ON THE BASIS OF MODE OF PAYMENT

SCRIP OR BAND DIVIDEND: A scrip dividend promise to pay the share holders at a future specific data. In case a company does not have a sufficient fund to pay dividends in cash, it may issue notes or bonds for amount duet share holders.PROPERTY DIVIDENDS: Property dividends are paid in the form of some assets other than cash. They are distributed under exceptational circumstances and are not popular in India.COMPOSITE DIVIDEND: Where dividends are paid party in the form of cash and party in other forms. It is called composite dividend. It is not a new technologies for payment of dividend it is an earlier discussed technologies

ON THE BASIS OF TIME PAYMENT

SPECIAL DIVIDEND

REGULAR DIVIDEND

INTERIM DIVIDEND

ON THE BASIS OF TIME PAYMENT

INTERIM DIVIDEND: Generally dividends are declared at the end of financial year, but sometime company buys dividends before if declares dividend in annual general meeting

IN OTHER WARDS

Dividends paid between tow annual general meetings. It is paid when company’s board of director thinking that company earns huge amount of profits

ON THE BASIS OF TIME PAYMENT

REGULAR DIVIDEND: It is decaled on annual general meeting is called regular dividend. Every year company declares dividends in is annual general meetingSPECIAL DIVIDEND: A sound dividend policy should be formed in such a way that rate of dividend should be change frequents year after year.Fate of dividends be static. If there is huge abnormal extra profits, company should declared as special dividend. Where share holders don of extra per the same years it may or may not be happens.

Thank You

K PREMCHAND12ME1E0020