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Different Types of Dividends a Company can Pay Out?

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What are the different types of dividends that a company can pay out?
Which type would you prefer? Explain why.
When should a company pay dividends?

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Solution Summary

Discusses the different types of dividends that a company can pay out.

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Cash dividends - paid out in the form of cash

Stock dividends - paid out in the form of new shares (say for every 100 shares you own, you get five new shares). Note: This is very similar to a stock split in that it increases the total number of shares while lowering the price of each share and does not change the market capitalization or the total value of the shares ...

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