What is the difference between cash dividends and stock dividends?
Dividends are a form of payment that a company may provide to its shareholders, usually out of current or accumulated earnings (i.e. retained earnings). Companies are not required to pay out a dividend to their shareholders. The dividend amount is set by the company’s board of directors and is typically paid on a quarterly basis from the company’s current or retained earnings. The amount and type of dividend received by shareholders can vary from quarter to quarter or year to year, depending on the financial position of the company. When dividends are paid out they can be in several forms, for example, cash or stock dividends. There are three dates that are important to remember when it comes to the distribution of dividends. These dates include: the date of declaration, the date of record and the date of payment. On the date of declaration, the company’s board of directors determines the terms of the dividend distribution including how much is to be paid, the type of payment, the date
