A cash dividend is a distribution of a portion of a company’s earnings to its shareholders in the form of cash rather than additional shares. These dividends are paid net of income tax, and shareholders typically receive credit for the tax deducted.
Pre-acquisition profits refer to retained earnings accumulated by a company before it is acquired by another entity. These profits are not to be distributed to the shareholders of the acquiring company as dividends, as they represent a recovery of the cost of investment rather than income.
Preferred dividends are distributions from corporate earnings and profits paid to owners of preferred stock. These payments take priority over those to be made to common shareholders.
A restricted surplus refers to the portion of shareholders' equity that is not available for dividend distribution to shareholders, often due to legal or regulatory requirements.
Stock dividends refer to the payment of a corporate dividend in the form of additional shares rather than cash. This form of dividend distribution allows shareholders to increase their holdings in the company without any immediate tax implications or outflows for the corporation.
A stock-transfer agent acts as a third-party intermediary to manage and maintain a company’s records of its shareholders, executing various tasks such as managing securities transfers, handling lost certificates, and distributing dividends.
