lecture 2 part 1 Flashcards
what is the earnings per share formula (EPS)
= net income / common shares outstanding
does a corporation get to keep the entire dividend
dividend is after corporate taxes are paid
do individuals get to keep the entire dividend
dividend received taxed in the hands of the shareholders
dividend’s do receive preferential tax treatment
what is a blue chip company
reputable brand built and maintained over many years and are stable companies
what is the profile of dividend investor
income provides cash meet investors needs and source of income replacement
downside risk protection
provides defense during market sell - offs
companies that consistently increase their dividends are typically high quality and stable businesses
what are all the types of (cash) dividend
regular cash dividend, extra dividend, special dividend, liquidating dividend
what is a regular cash dividend
cash dividend paid on a regular basis
what is an extra dividend
meet target distribution without updating regular cash dividend
give an example of an extra dividend
a hotel sees higher than usual profits post covid lockdown, but expects profitability to return to normal in the coming years
what is a special dividend
its a significant one - time dividend and is distributed with accumulated cash or net proceeds of a significant transactions
give an example of a special dividend
a company sold a division of the business and wants to distribute this significant profit to its shareholders
what is a liquidating dividend
distribution of remaining cash during a liquidating
give an example of liquidating dividend
a company is bankrupt, paid liabilities and wants to distribute remaining cash
what is dividend yield
how much a company pays out in dividends each year relative to its stock price and reflects stock price performance
