Common Stock (FNCE 3000 On-Line) - Key Terms/ConceptsTHE DIVIDEND PROCESSWrit-lecdividend A payment of all or a portion of the corporations net income (profit)to the shareholders.A corporation does not have to pay dividendswho decides whether the corporation will pay a dividend: Board of DirectorsDividends are NOT paid on ________Treasury_____________________ shares.Dividends are only paid on ______Outstanding shares_.Outstanding shares = Issued shares- treasury sharesVid-lectypes of dividends:1. Cash Dividends2. Stock DividendsDRIP A dividend reinvestment plan that automatically uses cashdividends to buy more shares of stock).3. PropertyThe Dividend Processdeclaration date Day on which the board votes to pay dividendrecord date The day on which you must own the stock in order to receivedividendA (Cash) = L (dividend payable) + OE (retained earnings)($100)($100)transfer agent They maintain shareholders rosterpayment date The day on which the dividend checks are mailedPractice SELFIEQ1. Retained earnings is reduced on: Declaration Date2. Dividends become legally obligated, and therefore a liability is recorded, on: TheDeclaration Date3. The corporate charter authorizes 325 million shares, 30 million of which arecurrently held as treasury stock. A total of 160 million shares have been sold toinvestors. If there is a dividend, on how many shares will it be paid? 130 millionOutstanding Shares = Issued Shares ...
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