Cash dividends are the most common form of payment and are paid out in currency, usually via electronic funds transfer or a printed paper check.Such dividends are a form of investment income and are usually taxable to the recipient in the year they are paid.Thus, if a person owns 100 shares and the cash dividend is 50 cents per share, the holder of the stock will be paid .Dividends paid are not classified as an expense, but rather a deduction of retained earnings.When a corporation earns a profit or surplus, the corporation is able to re-invest the profit in the business (called retained earnings) and pay a proportion of the profit as a dividend to shareholders.Distribution to shareholders may be in cash (usually a deposit into a bank account) or, if the corporation has a dividend reinvestment plan, the amount can be paid by the issue of further shares or share repurchase.Interim dividends are dividend payments made before a company's Annual General Meeting (AGM) and final financial statements.This declared dividend usually accompanies the company's interim financial statements. Financial assets with a known market value can be distributed as dividends; warrants are sometimes distributed in this way.
For each share owned, a declared amount of money is distributed.
They are usually issued in proportion to shares owned (for example, for every 100 shares of stock owned, a 5% stock dividend will yield 5 extra shares).
Nothing tangible will be gained if the stock is split because the total number of shares increases, lowering the price of each share, without changing the market capitalization, or total value, of the shares held.
Property dividends or dividends in specie (Latin for "in kind") are those paid out in the form of assets from the issuing corporation or another corporation, such as a subsidiary corporation.
They are relatively rare and most frequently are securities of other companies owned by the issuer, however they can take other forms, such as products and services.