Dividends on shares are paid by joint stock companies quarterly, every six months, every nine months or every year - depending on the policy of the joint stock company. Dividends are calculated depending on the types of shares, their number. There are cases when the company is not entitled to pay dividends.
Instructions
Step 1
A dividend is a part of the profit of a joint-stock company per share that remains after all taxes and contributions have been paid. Each investor holding shares as of the date of the register of shareholders is entitled to receive dividends. Earnings on shares are distributed to shareholders proportionally depending on the number and types of shares they hold.
Step 2
There are several types of shares, as a rule, the most commonly used types are ordinary and preferred shares. Dividends on preferred shares are paid in the form of a fixed amount or a certain percentage of earnings on shares. Accordingly, payments on preferred shares precede payments on ordinary shares. Dividends on ordinary shares are the earnings remaining after the dividends on preferred shares have been paid.
Step 3
Let's give an example. The joint-stock company has issued 100 shares, of which 10 are preferred. The society's profit after all taxes and contributions was $ 60. The Society has determined that for each preferred share, the dividend must be $ 5. Thus, holders of preferred shares will receive 5 x 10 = $ 50. The remaining $ 10 is divided by the remaining 90 ordinary shares. Accordingly, 1 share will account for approximately $ 0.11.
Step 4
It is worth remembering that joint stock companies are not always entitled to pay dividends. For example, a joint-stock company does not have the right to pay dividends before payment of (full) authorized capital, if it has signs of bankruptcy or will have them after the payment of dividends. The term and procedure for the payment of dividends of the company are determined by the charter of the company or by the decision of the general meeting of its shareholders. If the term is not specified in the charter, then it is considered equal to 60 days from the date of the adoption at the general meeting of shareholders of the decision on the payment of dividends.
