The Different Types of Dividends

1. Cash dividends
These are the most common and are usually paid four times a year.
2. Stock dividends
– Stock dividends are not true dividends in that a distribution of
stock does not affect the value of the firm or the wealth of the
shareholder. These dividends are paid out of Treasury stock.
3. Stock split
– Similar to a stock dividend. The NYSE requires share
distributions of less than 25% to be treated as stock dividends.
4. Share repurchases
– The company repurchases the stock. Shareholders pay tax only on
the capital gains portion.
– Same effect as a regular dividend as cash LEAVES the
corporation.