Editing Dividend (section)

==Forms of payment==
Cash dividends are the most common form of payment and are paid out in currency, usually via [[electronic funds transfer]] or a printed paper [[cheque|check]]. Such dividends are a form of investment income of the shareholder, usually treated as earned in the year they are paid (and not necessarily in the year a dividend was declared). For each share owned, a declared amount of money is distributed. Thus, if a person owns 100 shares and the cash dividend is 50 cents per share, the holder of the stock will be paid $50. Dividends paid are not classified as an [[expense]], but rather a deduction of [[retained earnings]]. Dividends paid does not appear on an [[income statement]], but does appear on the [[balance sheet]].

Different classes of stocks have different priorities when it comes to dividend payments. Preferred stocks have priority claims on a company's income. A company must pay dividends on its preferred shares before distributing income to common share shareholders.

Stock or scrip dividends are those paid out in the form of additional shares of the issuing corporation, or another corporation (such as its subsidiary corporation). They are usually issued in proportion to shares owned (for example, for every 100 shares of stock owned, a 5% stock dividend will yield 5 extra shares).

Nothing tangible will be gained if the stock is [[stock split|split]] because the total number of shares increases, lowering the price of each share, without changing the total value of the shares held. (See also [[Stock dilution]].)

Stock dividend distributions do not affect the market capitalization of a company.<ref>{{cite web|url=https://www.principlesofaccounting.com/chapter-14/splits-and-dividends/|title=Stock Splits and Stock Dividends Management |website=PrinciplesofAccounting.com}}</ref><ref>{{cite web|url=https://www.investopedia.com/terms/s/stockdividend.asp|title=Stock Dividend |date=30 June 2023 |website=Investopedia |first1=James |last1=Chen }}</ref> Stock dividends are not includable in the gross income of the shareholder for US income tax purposes. Because the shares are issued for proceeds equal to the pre-existing market price of the shares; there is no negative dilution in the amount recoverable.<ref>{{cite web|url=https://www.sec.gov/rules/sro/nyse/2015/34-76649-ex5.pdf |archive-url=https://ghostarchive.org/archive/20221009/https://www.sec.gov/rules/sro/nyse/2015/34-76649-ex5.pdf |archive-date=9 October 2022 |url-status=live|title=Exhibit 5 |website=SEC.gov }}</ref><!-- When we (Kinder Morgan Management, LLC) receive additional i-units from Kinder Morgan Energy Partners, L.P., we will issue and distribute an equal number of our shares to all of our shareholders. ~ The number of i-units and shares will remain equal.--><ref>{{cite web |url-status=dead |url=http://www.kindermorgan.com/investor/kmr_2001_annual_report_financials.pdf |title=Annual Report Pursuant to Section 13 or 15(D) of the Securities Exchange Act of 1934 |archive-url=https://web.archive.org/web/20110103082512/http://www.kindermorgan.com/investor/kmr_2001_annual_report_financials.pdf|archive-date=3 January 2011 |website=Kinder Morgan }} <!--—Open buy orders and open stop
orders to sell shall be reduced by the proportional value of a stock dividend or stock distribution on the day security sells ex-dividend or ex-distribution. The new price of the order is determined by dividing the price of the original order by 100% plus the percentage value of the stock dividend or stock distribution. For example, in a stock dividend of 3%, the price of an order would be divided by 103%.--></ref>

Property dividends or dividends ''in specie'' ([[Latin language|Latin]] for "[[in kind]]") are those paid out in the form of assets from the issuing corporation or another corporation, such as a subsidiary corporation. They are relatively rare and most frequently are securities of other companies owned by the issuer, however, they can take other forms, such as products and services.

Interim dividends are dividend payments made before a company's Annual General Meeting (AGM) and final financial statements. This declared dividend usually accompanies the company's interim financial statements.

Other dividends can be used in [[structured finance]]. Financial assets with known market value can be distributed as dividends; warrants are sometimes distributed in this way. For large companies with subsidiaries, dividends can take the form of shares in a subsidiary company. A common technique for "spinning off" a company from its parent is to distribute shares in the new company to the old company's shareholders. The new shares can then be traded independently.{{Citation needed|date=October 2022}}