Week 3 DQ3

Discuss the different types of dividends that a corporation may issue. Discuss why a corporation should issue dividends and discuss what dividend you would prefer.

The types of dividends that a company may issue are: cash dividends, where the company receives a check shortly after the declaration. There are also property dividends, these are forms of compensation other than cash. For example, merchandise, real estate, a commodity, or another type of asset. Then you have liquidation dividends, these are dividends that are issued at a rate from paid-in-capital rather than being based on retained earnings. Finally, there is stock earnings, when a company issues it's own stock to its stockholders.

A company should only pay dividends if it is unable to reinvest its cash at a higher...