Affects of declaring dividends and liquidating

by  |  23-Jun-2019 19:32

Retained earnings (profits that have not been distributed as dividends) are shown in the shareholders' equity section on the company's balance sheet – the same as its issued share capital.Public companies usually pay dividends on a fixed schedule, but may declare a dividend at any time, sometimes called a special dividend to distinguish it from the fixed schedule dividends.

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Dividends paid does not show up on an income statement but does appear on the balance sheet.

Stock or scrip dividends are those paid out in the form of additional stock shares of the issuing corporation, or another corporation (such as its subsidiary corporation).

It is relatively common for a stock's price to decrease on the ex-dividend date by an amount roughly equal to the dividend paid.

This reflects the decrease in the company's assets resulting from the declaration of the dividend.

This is an important date for any company that has many stockholders, including those that trade on exchanges, to enable reconciliation of who is entitled to be paid the dividend.

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