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Why would Microsoft be a good stock to own?
It's not. At least they pay a dividend.
How does preferred stock differ from common stock?
pay dividend before common stock
How does stockholders of Berkshire Hathaway profit?
You profit if this stock moves up in price. It does not pay a dividend. However, it could pay a dividend in the future.
Can dividend checks be reinvest it in the stock and not pay capital gains tax on it as income?
No.
How often are stock dividends paid?
Most companies will pay twice a year, an interim dividend followed by a final dividend, some companies pay four times a year.
Does the 70 percent dividend exclusion include preferred stock?
70 percent dividend income exclusion on the tax returns of corporations. That is, if a corporation owns preferred stock, it can exclude 70 percent of dividend income and pay income taxes on only 30 percent of dividend income, both preferred and common stock.
Is payment of a dividend a requirement of a stock corporation?
No, corporations are not required to pay dividends on their stocks. However, some mutual funds are designed to only invest in dividend-paying stocks, so some corporations pay a miniscule dividend in order that those mutual funds might buy their stock.
What is the importance of dividend history in finances?
Dividend history is important especially for stock investing. Without knowing the dividend history for a company, you will never know if the company will be reliable to pay the dividend every quarter.
How do you calculate ex-stock dividend price?
Ex-stock dividend is equal to the price of the dividend of the stock, the only difference is the face that the dividend is actually paid to the seller rather then the buyer of the stock.
What is a small stock dividend defined as?
Some times a corporation would like to pay out a dividend but they just don't have the money. They could pay what is called a stock dividend. For instants they could pay out one share for every 10 shares you already have. When they do this you are not really gaining anything, because it usually means that the stock shares are worth 10% less. But at least it makes people feel good, when they get that stock certificate in the mail. Some times a corp. will give you a choice. You can take a dividend check or more stock. One more thing. Sometimes you do not get a stock certificate for the additional shares. Some times they are put on a statement and the shares are held for you.
How would the price of a stock be affected by its dividend?
Paying a dividend costs the company and as such will decrease the value of the company and the stock. If all other factors are equal, a buyer would prefer a stock that is expected to pay the higher dividend. If Company A is expected to pay $10 per share annually and Company B $8, an investor who wants to make 8% would be willing to bid $125 for a share of Company A but only $100 for Company B. On the date that a dividend is effective, a company's stock will drop by the amount of the dividend because that amount will be paid to the person who owned the stock at the beginning of that day.
Does a stock dividend increase total assets?
Typically, the answer is no. Most stocks will drop slightly after the dividend is paid, and this will make your total asset pool worth the same amount after the dividend is paid. That is not to say that it is bad for a company to pay dividends. In fact, dividends tend to make the price of a stock take on some of the characteristics of a bond. Companies that consistently pay out a good dividend can have more stable stock prices as the economy slows and interest rates drop.
