The different types of dividends that a company can pay out:
The types of dividends that a company can pay out are: cash dividends – recipient receives a check shortly after the declaration; property dividends – forms of compensation other than cash, i.e. merchandise, real estate, a commodity, or some other asset; liquidation dividends – dividends issued at a rate from paid-in capital rather than being based on retained earnings; stock earnings – a company’s issuance of its own stock to its stockholders.
Which type would you prefer?
I think that as a shareholder of a company that I would want to receive a quick return on my investment, and if that were the case, I would prefer to receive cash dividends. If I had a long-term interest in the company I would also like to receive cash, but would probably like to receive stock dividends on occasion. And if the company’s revenues were projected to be lower in coming years I would likely opt for liquidation dividends, so that I would be getting some sort of return on my investment.
When should a company pay dividends?
Companies will usually issue dividends during profitable years, unless otherwise stated.
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