A common stock dividend is the
dividend
A dividend is a distribution of profits by a corporation to its shareholders. When a corporation earns a profit or surplus, it is able to pay a portion of the profit as a dividend to shareholders. Any amount not distributed is taken to be re-in ...
paid to
common stock
Common stock is a form of corporate equity ownership, a type of security. The terms voting share and ordinary share are also used frequently outside of the United States. They are known as equity shares or ordinary shares in the UK and other Com ...
owners from the profits of the company. Like other dividends, the payout is in the form of either cash or stock. The law may regulate the size of the common stock dividend particularly when the payout is a cash distribution tantamount to a
liquidation
Liquidation is the process in accounting by which a company is brought to an end in Canada, United Kingdom, United States, Ireland, Australia, New Zealand, Italy, and many other countries. The assets and property of the company are redistrib ...
. Such cash dividends may serve the intent of defrauding
creditor
A creditor or lender is a party (e.g., person, organization, company, or government) that has a claim on the services of a second party. It is a person or institution to whom money is owed. The first party, in general, has provided some property ...
s.
Cash dividend
A cash dividend is the distribution of profits to the common stock shareholders, the owners of the corporation. Such distributions are in equal amounts to the shareholders depending on the portion of the company they own.
Stock dividend
A stock dividend to common stock dividend owners distributes additional stock in the company to the common stock shareholders. Such dividends are evenly distributed to the shareholders depending on their portion of ownership in the corporation. Such distributions maintain their proportional ownership in the corporation.
See also
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Common stock
Common stock is a form of corporate equity ownership, a type of security. The terms voting share and ordinary share are also used frequently outside of the United States. They are known as equity shares or ordinary shares in the UK and other Com ...
*
Common stock dividends and DRIP
Common may refer to:
Places
* Common, a townland in County Tyrone, Northern Ireland
* Boston Common, a central public park in Boston, Massachusetts
* Cambridge Common, common land area in Cambridge, Massachusetts
* Clapham Common, originally com ...
*
Dividend
A dividend is a distribution of profits by a corporation to its shareholders. When a corporation earns a profit or surplus, it is able to pay a portion of the profit as a dividend to shareholders. Any amount not distributed is taken to be re-in ...
*
Dividend reinvestment plan
A dividend reinvestment program or dividend reinvestment plan (DRIP) is an equity investment option offered directly from the underlying company. The investor does not receive dividends directly as cash; instead, the investor's dividends are direc ...
*
Financial regulation
Financial regulation is a form of regulation or supervision, which subjects financial institutions to certain requirements, restrictions and guidelines, aiming to maintain the stability and integrity of the financial system. This may be handled ...
*
Stock split
A stock split or stock divide increases the number of shares in a company. For example, after a 2-for-1 split, each investor will own double the number of shares, and each share will be worth half as much.
A stock split causes a decrease of mark ...
**
U.S. Securities and Exchange Commission
The U.S. Securities and Exchange Commission (SEC) is an independent agency of the United States federal government, created in the aftermath of the Wall Street Crash of 1929. The primary purpose of the SEC is to enforce the law against market ...
(SEC)
External links
Securities and Exchange Commission (USA) Corporate law
Dividends
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