0
Want this question answered?
Be notified when an answer is posted
Add your answer:
Earn +20 pts
What is a 1099 and do you have to file it?
A 1099 is a tax form used to report and pay taxes on income other than wages and salaries. Such income could include interest or dividends paid you from your investments or work you contracted to do. Taxes are bit calculated and paid for income from 1099's which means it is your responsibility to pay them when you file your taxes. And YES you do have to file them.
If the retained earnings account increases from the beginning of the year to the end of the year what will happen next?
Net income is greater than dividends
What is difference between shares and stock?
Share: A unit of ownership interest in a corporation or financial asset. While owning shares in a business does not mean that the shareholder has direct control over the business's day-to-day operations, being a shareholder does entitle the possessor to an equal distribution in any profits, if any are declared in the form of dividends. The two main types of shares are common shares and preferred shares.While shares are often used to refer to the stock of a corporation, shares can also represent ownership of other classes of financial assets, such as mutual funds.Stock:A type of security that signifies ownership in a corporation and represents a claim on part of the corporation's assets and earnings. There are two main types of stock: common and preferred. Common stock usually entitles the owner to vote at shareholders' meetings and to receive dividends. Preferred stock generally does not have voting rights, but has a higher claim on assets and earnings than the common shares. For example, owners of preferred stock receive dividends before common shareholders and have priority in the event that a company goes bankrupt and is liquidated. all stocks are fully paid up and can be traded in market while all share may not be fully paid up.
What is the difference between dividends and interest expense?
Interest Expense is usually calculated by (Carrying Value of Liability*Yield Rate * Time). Carrying Value is the actual present value of the liability (including discounts earned, etc) Interest Expense is the money that actually goes out of the firm. Interest Paid is calculated by (Face Value of Liability*Interest Rate * Time). Interest Paid is the fair-value of dues from the firm, but is not the actual value of the liability. Interest Expense is the amount reflected in the books of the firm, and is usually higher than Interest Paid. This is because Interest Expense often includes the cost of discount amortization(this is necessary when the bond/other liability was gained at a discount. The amortization is worked into the formula above, and hence gives an amount higher than interest paid. This gives the total interest expensed by the Company.) Hope this helps. Cheers
Why is interest exspense said to cost the firm substantially less than the actual expense while dividends cost it 100 percent of the outlay?
Due to the after tax cost of a tax-deductible expense can be computed as the actual expense times one minus the tax rate, because a dividend on common stock is not tax-deductible, we say it cost 100 percent of the amount paid. Shannon Coffey Wayne, MI
Does a perferred stock mean the compay is perfered over other compaines in a particular industry?
No. It means that dividends that are paid out will be paid to holders of preferred stock FIRST. It often sells for a different price than regular shares.
Why do dividend decisions based on an overstated profit lead to erosion of capital?
By definition, dividends are paid out of profits, they can not be paid out of anything else (not loans, not losses, etc). If the dividends paid exceed profits for the same period the distribution is considered a return of capital (stock basis, additional paid in captial, etc). So an overstated profit WILL reulst in "erosion of capital" if correction of the overstatement results in profits being less than dividends.
Are unpaid cash dividends declared a liability of the corporation?
I'd say it's more of a capital than liability, tho depends on your accounting standards.
Why would a corporation rather borrow money and pay interest than sell stock and then pay dividends?
Interest is tax deductible, so amounts paid lower the tax they would have otherwise paid. Dividends are paid with after tax earnings..there is no tax deduction for them. Of course, someone receiving interest pays tax on it at their ordinary income rate, and someone receiving dividends pays tax at the capital gain rate, which is lower.
What is the difference between dividends and interest?
It is very important that the self directed investor understands the difference between dividends and interest.-Dividends- Dividends are generally paid to shareholders of a publicly traded company.-Interest- Earning interest would be from loaning your money. If you put your money in the bank or buy bonds you are actually loaning your money.The single most important reason for knowing the difference is tax. Dividends are taxed at a different rate than interest earned. It is suggested to seek professional accounting advice on how these tax rates affect you.
Why does the value of a share depend on dividends?
One of the most commonly made mistakes is that people relate the dividends paid to the financial health of the company. Let me say that more dividends paid does not mean comapny is doing good and vice versa. Generally, if the company pays less dividend because it requires that money for a new project which in turn will add to company growth. Thus stock price increases. If company does not have any new projects and still cut on dividends than stock price may go down. In short, if company can grow faster than the markets than it should give less dividends. However, if company is growing slower than the markets than it should give more dividends so that people can invest in markets and earn more. If comapny does not follow this logic than its stock price reduces.
Are dividends usually more stable than earnings?
yes
Are we required to report dividends less than 10?
Yes.
Why is year end dividend higher than monthly dividends?
Because you have use of the funds earlier by having monthly dividends than if you wait until year end for one payment
Why would a company issue a stock dividend instead of a cash dividend?
From InvestorWords.com: A dividend paid as additional shares of stock rather than as cash. If dividends paid are in the form of cash, those dividends are taxable. When a company issues a stock dividend, rather than cash, there usually are not tax consequences until the shares are sold. These additional shares of stock are usually distributed to shareholders at no cost. Please see the following site for additional information: http://en.wikipedia.org/wiki/Dividend
What are the characteristics of preference shares and ordinary shares?
Preferred shares in a company represent a larger interest in the company than common shares do. Preferred shareholders are paid dividends first, regularly and typically at a higher rate than common shareholders, and if the company declares bankruptcy they have priority over common shareholders who are last in line to get paid.
What is the difference between ordinary dividends versus qualified dividends?
Qualified dividends are taxed at flat capital gains tax rate (currently 15%) while ordinary dividends are taxed as ordinary income, depending on an individual's specific tax bracket. For dividends to be considered qualified, they have to be absent form the IRS unqualified dividend list and the underlying stock that pays the dividend must be held for a specified by IRS holding period (more than 60 days during the 120-day period beginning 60 days before the ex-dividend date, and for preferred stock, the holding period is 90 days during the 180-day period beginning 90 days before the stock's ex-dividend date). Examples of dividends that do not qualify are: - Dividends paid on money market accounts - Dividends from mutual funds attributable to interest and short-term capital gains - Dividends from real estate investment trusts (REITs) - Dividends received in your IRA
