In 2 -3 paragraphs please explain the following:
1. Compare a regular cash dividend with a periodic share repurchase. Which has greater appeal to you? Explain.
2. Explain a stock dividend and further explain if you would prefer it to a cash dividend.
3. What are stock splits and how desirable are they?
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1. Regular cash dividends are cash payments from a company to its shareholders. When a company makes a profit, some of it is reinvested in the business and some is paid to shareholders as a dividend. The dividends paid out to shareholders must be declared by the company and will usually be distributed quarterly. Regular cash dividends are the most common type of cash distribution and because these dividends are considered income, they are taxable in the year they were paid.
Periodic share repurchase is another type of cash dividend but it is less common. This plan gives shareholders the option to sell back their shares to the company at a set ...
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