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Why Stock buybacks are similar to dividends from the company?

At one time capital gains were taxed at a lower rate than dividends. Stock buy backs would reduce the number of shares making the remaining shares worth more in theory. Thus a person could sell his shares back to the company for more money than if the company had paid a dividend. Today, that is no longer the case. Dividends are taxed at about the same level as capital gains. A stock buy back gives absolutely no advantage to a stockholder. It takes money that could be used for dividends and uses it for something else. When someone claims that the accounting rules of 15 years ago still apply, you should double check.


Cumulative preference shares?

cumulative preference shares are those shares which get dividends for the current year and for the all previouse years if they were not paid due to the bad position of the compnay. suppose compay was suppose to pay dividends @ 10% every year to cumulative shares holders but could not pay fro two years due to bad financial position, and in the current year company is stable and willing to pay, so company will pay previouse + current year dividends to cumulative share holders, if it was non-cumulative share hoders compay would not pay all dividend, but it would pay only current year dividend. this is the difference between cumulative and non cumulative shares with respect to dividend payment. conculsion: cumulative gets all dividends if not paid earlier due to financail crises(previouse+ current) non cumulative gets only current dividend and not previouse dividend if not paid due to financial crises ( only current year dividend and all previouse are not paid)


Why are my Robinhood dividends not showing up in my account?

There could be several reasons why your Robinhood dividends are not showing up in your account. It's possible that the dividends have not been processed yet, there may be a delay in the system updating, or there could be an issue with your account settings. I recommend reaching out to Robinhood customer support for assistance in resolving this issue.


What is the total number of implied shares outstanding for this company?

The total number of implied shares outstanding for a company includes all common shares currently issued and any potential shares that could be issued from convertible securities or stock options.


Would you ever pay out dividends when your firms annual net profit is negative?

No, paying out dividends when a firm's annual net profit is negative is generally not advisable. Dividends are typically distributed from profits, and negative earnings indicate financial difficulties. Distributing dividends in such situations could strain the company's cash flow and undermine its ability to invest in necessary operations or cover losses. It's more prudent to retain earnings to stabilize the business.

Related Questions

For investing in shares do you need a tax return file?

No, the buying of stock in itself does not cause any taxable event. The selling would. Also, if the stock pays any dividends, the dividends could be taxable.


Why Stock buybacks are similar to dividends from the company?

At one time capital gains were taxed at a lower rate than dividends. Stock buy backs would reduce the number of shares making the remaining shares worth more in theory. Thus a person could sell his shares back to the company for more money than if the company had paid a dividend. Today, that is no longer the case. Dividends are taxed at about the same level as capital gains. A stock buy back gives absolutely no advantage to a stockholder. It takes money that could be used for dividends and uses it for something else. When someone claims that the accounting rules of 15 years ago still apply, you should double check.


What is non-cumulative perference share?

non cumulative shares are those shares which do not get previouse dividends due to company's bad financial position. for example, if they were suppose to get dividend @10% last year, but could not get due to bad financial position of the company, and in the current year company gets stable and is willing to pay dividend, so it will pay only current year dividends and not last year dividends... if it was cumulative share company would pay last year and current year dividend.. conclusion: non cumulative share doesnot get previouse dividends and cumulative share gets all dividends (previouse+ current) when compnay restores its good financial position.


What is non cumulative perference share?

non cumulative shares are those shares which do not get previouse dividends due to company's bad financial position. for example, if they were suppose to get dividend @10% last year, but could not get due to bad financial position of the company, and in the current year company gets stable and is willing to pay dividend, so it will pay only current year dividends and not last year dividends... if it was cumulative share company would pay last year and current year dividend.. conclusion: non cumulative share doesnot get previouse dividends and cumulative share gets all dividends (previouse+ current) when compnay restores its good financial position.


Cumulative preference shares?

cumulative preference shares are those shares which get dividends for the current year and for the all previouse years if they were not paid due to the bad position of the compnay. suppose compay was suppose to pay dividends @ 10% every year to cumulative shares holders but could not pay fro two years due to bad financial position, and in the current year company is stable and willing to pay, so company will pay previouse + current year dividends to cumulative share holders, if it was non-cumulative share hoders compay would not pay all dividend, but it would pay only current year dividend. this is the difference between cumulative and non cumulative shares with respect to dividend payment. conculsion: cumulative gets all dividends if not paid earlier due to financail crises(previouse+ current) non cumulative gets only current dividend and not previouse dividend if not paid due to financial crises ( only current year dividend and all previouse are not paid)


How many shares does Motorola have outstanding?

check a shares website it could tell you company profits, shares and debts!


How much is 3000 shares bought in 1970 from abbey national worth today?

To determine the current value of 3,000 shares of Abbey National bought in 1970, you would need to know the original purchase price, any stock splits, dividends, and the current share price after Abbey National's acquisition by Santander in 2004. Since Abbey National shares were converted to Santander shares, you would also need to find the current price of Santander shares. A financial advisor or online stock price history tool could provide the most accurate and up-to-date valuation.


Why are my Robinhood dividends not showing up in my account?

There could be several reasons why your Robinhood dividends are not showing up in your account. It's possible that the dividends have not been processed yet, there may be a delay in the system updating, or there could be an issue with your account settings. I recommend reaching out to Robinhood customer support for assistance in resolving this issue.


What is the similarities and difference between dividends and expenses?

A real differrence between dividends and expences is that dividends are being produced from a net account and from which use a firm could profit themselves.Expences are the daily outlays which are being used to comfort are daily life routines.


What factors are considered before dividends are paid out?

A corporation's responsibilities include increasing shareholder value. Dividends can play an important role in this regard. A company has to decide what to do with excess cash on its books but there are several options. They could reinvest that money into the company. This could be purchasing new equipment, hiring on new employees, expanding into new regions, etc etc. They could use the money to aquire another company. They could pay off debt. They could buyback their own shares. Last but not least they could pay out a dividend or increase existing dividends. It all comes down to what is the best way to return value to shareholders. Most new companies do not pay dividends because their best use for cash is to grow their business. On the other hand many utility companies pay nice dividends due to the fact that it would be difficult to use that money to expand in that type of business. Therefor giving it back to the shareholders so that they may invest it however they may choose to makes more sense. When increasing a dividend a corporation may look at trying to set it at a sustainable level. Decreasing a dividend is usually considered a bad sign and shares tend to decrease in value. One last thing to consider is the tax environment. The lower the capital gains taxes are the more important a dividend becomes to the individual shareholders.


What factor do firms consider before dividends are declared?

A corporations responsibility is to increase shareholder value. Dividends can play an important roll in this regard. A company has to decide what to do with excess cash on its books but there are several options. They could reinvest that money into the company. This could be purchasing new equipment, hiring on new employees, expanding into new regions, etc etc. They could use the money to aquire another company. They could pay off debt. They could buyback their own shares. Last but not least they could pay out a dividend or increase existing dividends. It all comes down to what is the best way to return value to shareholders. Most new companies do not pay dividends because their best use for cash is to grow their business. On the other hand many utility companies pay nice dividends due to the fact that it would be difficult to use that money to expand in that type of business. Therefor giving it back to the shareholders so that they may invest it however they may choose to makes more sense. When increasing a dividend a corporation may look at trying to set it at a sustainable level. Decreasing a dividend is usually considered a bad sign and shares tend to decrease in value. One last thing to consider is the tax environment. The lower the capital gains taxes are the more important a dividend becomes to the individual shareholders.


What would 3 shares of IBM stock bought in 1968 be worth today?

To determine the value of 3 shares of IBM stock bought in 1968, you would need to look at the historical stock price from that year and the current price. In 1968, IBM shares were valued at approximately $43.50 each, making the initial investment around $130.50. As of October 2023, IBM's stock price is around $140 per share, meaning the 3 shares would now be worth approximately $420. However, this calculation does not account for stock splits or dividends, which could significantly increase the value.