Dividend: The amount that shareholders receive in return of their investment is called as a dividend. To explain: The concept of the dividend.

Question

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Answer 1

Question

Chapter 14, Problem 1Q

(a)

To determine

Dividend: The amount that shareholders receive in return of their investment is called as a dividend.

To explain: The concept of the dividend.

(a)

Expert Solution

Answer to Problem 1Q

The distribution of net income of the company to the shareholders in return for their investment is the dividend.

Explanation of Solution

The company provides return to its shareholders by paying a dividend which is out of the profit of the company. The payment of dividend can be either in cash or stock.
The dividend is paid according to the number of share of each shareholder. Preference shareholder receives a fixed rate of dividend but equity shareholders receive dividend only when there is a profit in the company.

Conclusion

Thus, the amount that shareholders receive in return of their investment is the dividend.

(b)

To determine

To explain: The payment of a dividend in cash or kind.

(b)

Expert Solution

Answer to Problem 1Q

It is not always compulsory that dividend must be paid in cash.

Explanation of Solution

The company provides return to its shareholders by paying a dividend which is out of the profit of the company.
Dividend in cash is paid only when the company has the surplus cash for distribution. Higher the profit, higher is the dividend and lower the profit lower is the dividend.
When the company does not have enough cash to distribute as a dividend it compensates the shareholders by repurchasing their shares. Buyback or repurchase of shares supports the share price during weak periods.
The payment of cash dividend should in such a way that it should not disturb company’s growth and expansion plans as well as its other cash payments.

Conclusion

Thus, the payment of dividend is not always in cash.

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Solution for the Question

Answer 2

Question

Chapter 14, Problem 1Q

(a)

To determine

Dividend: The amount that shareholders receive in return of their investment is called as a dividend.

To explain: The concept of the dividend.

(a)

Expert Solution

Answer to Problem 1Q

The distribution of net income of the company to the shareholders in return for their investment is the dividend.

Explanation of Solution

The company provides return to its shareholders by paying a dividend which is out of the profit of the company. The payment of dividend can be either in cash or stock.
The dividend is paid according to the number of share of each shareholder. Preference shareholder receives a fixed rate of dividend but equity shareholders receive dividend only when there is a profit in the company.

Conclusion

Thus, the amount that shareholders receive in return of their investment is the dividend.

(b)

To determine

To explain: The payment of a dividend in cash or kind.

(b)

Expert Solution

Answer to Problem 1Q

It is not always compulsory that dividend must be paid in cash.

Explanation of Solution

The company provides return to its shareholders by paying a dividend which is out of the profit of the company.
Dividend in cash is paid only when the company has the surplus cash for distribution. Higher the profit, higher is the dividend and lower the profit lower is the dividend.
When the company does not have enough cash to distribute as a dividend it compensates the shareholders by repurchasing their shares. Buyback or repurchase of shares supports the share price during weak periods.
The payment of cash dividend should in such a way that it should not disturb company’s growth and expansion plans as well as its other cash payments.

Conclusion

Thus, the payment of dividend is not always in cash.

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Answer 3

Question

Chapter 14, Problem 1Q

(a)

To determine

Dividend: The amount that shareholders receive in return of their investment is called as a dividend.

To explain: The concept of the dividend.

(a)

Expert Solution

Answer to Problem 1Q

The distribution of net income of the company to the shareholders in return for their investment is the dividend.

Explanation of Solution

The company provides return to its shareholders by paying a dividend which is out of the profit of the company. The payment of dividend can be either in cash or stock.
The dividend is paid according to the number of share of each shareholder. Preference shareholder receives a fixed rate of dividend but equity shareholders receive dividend only when there is a profit in the company.

Conclusion

Thus, the amount that shareholders receive in return of their investment is the dividend.

(b)

To determine

To explain: The payment of a dividend in cash or kind.

(b)

Expert Solution

Answer to Problem 1Q

It is not always compulsory that dividend must be paid in cash.

Explanation of Solution

The company provides return to its shareholders by paying a dividend which is out of the profit of the company.
Dividend in cash is paid only when the company has the surplus cash for distribution. Higher the profit, higher is the dividend and lower the profit lower is the dividend.
When the company does not have enough cash to distribute as a dividend it compensates the shareholders by repurchasing their shares. Buyback or repurchase of shares supports the share price during weak periods.
The payment of cash dividend should in such a way that it should not disturb company’s growth and expansion plans as well as its other cash payments.

Conclusion

Thus, the payment of dividend is not always in cash.

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Answer 4

Question

Chapter 14, Problem 1Q

(a)

To determine

Dividend: The amount that shareholders receive in return of their investment is called as a dividend.

To explain: The concept of the dividend.

(a)

Expert Solution

Answer to Problem 1Q

The distribution of net income of the company to the shareholders in return for their investment is the dividend.

Explanation of Solution

The company provides return to its shareholders by paying a dividend which is out of the profit of the company. The payment of dividend can be either in cash or stock.
The dividend is paid according to the number of share of each shareholder. Preference shareholder receives a fixed rate of dividend but equity shareholders receive dividend only when there is a profit in the company.

Conclusion

Thus, the amount that shareholders receive in return of their investment is the dividend.

(b)

To determine

To explain: The payment of a dividend in cash or kind.

(b)

Expert Solution

Answer to Problem 1Q

It is not always compulsory that dividend must be paid in cash.

Explanation of Solution

The company provides return to its shareholders by paying a dividend which is out of the profit of the company.
Dividend in cash is paid only when the company has the surplus cash for distribution. Higher the profit, higher is the dividend and lower the profit lower is the dividend.
When the company does not have enough cash to distribute as a dividend it compensates the shareholders by repurchasing their shares. Buyback or repurchase of shares supports the share price during weak periods.
The payment of cash dividend should in such a way that it should not disturb company’s growth and expansion plans as well as its other cash payments.

Conclusion

Thus, the payment of dividend is not always in cash.

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Answer 5

Chapter 14, Problem 1Q

(a)

To determine

Dividend: The amount that shareholders receive in return of their investment is called as a dividend.

To explain: The concept of the dividend.

(a)

Expert Solution

Answer to Problem 1Q

The distribution of net income of the company to the shareholders in return for their investment is the dividend.

Explanation of Solution

The company provides return to its shareholders by paying a dividend which is out of the profit of the company. The payment of dividend can be either in cash or stock.
The dividend is paid according to the number of share of each shareholder. Preference shareholder receives a fixed rate of dividend but equity shareholders receive dividend only when there is a profit in the company.

Conclusion

Thus, the amount that shareholders receive in return of their investment is the dividend.

(b)

To determine

To explain: The payment of a dividend in cash or kind.

(b)

Expert Solution

Answer to Problem 1Q

It is not always compulsory that dividend must be paid in cash.

Explanation of Solution

The company provides return to its shareholders by paying a dividend which is out of the profit of the company.
Dividend in cash is paid only when the company has the surplus cash for distribution. Higher the profit, higher is the dividend and lower the profit lower is the dividend.
When the company does not have enough cash to distribute as a dividend it compensates the shareholders by repurchasing their shares. Buyback or repurchase of shares supports the share price during weak periods.
The payment of cash dividend should in such a way that it should not disturb company’s growth and expansion plans as well as its other cash payments.

Conclusion

Thus, the payment of dividend is not always in cash.

Answer 6

Chapter 14, Problem 1Q

(a)

To determine

Dividend: The amount that shareholders receive in return of their investment is called as a dividend.

To explain: The concept of the dividend.

(a)

Expert Solution

Answer to Problem 1Q

The distribution of net income of the company to the shareholders in return for their investment is the dividend.

Explanation of Solution

The company provides return to its shareholders by paying a dividend which is out of the profit of the company. The payment of dividend can be either in cash or stock.
The dividend is paid according to the number of share of each shareholder. Preference shareholder receives a fixed rate of dividend but equity shareholders receive dividend only when there is a profit in the company.

Conclusion

Thus, the amount that shareholders receive in return of their investment is the dividend.

Answer 7

Chapter 14, Problem 1Q

(a)

To determine

Dividend: The amount that shareholders receive in return of their investment is called as a dividend.

To explain: The concept of the dividend.

Answer 8

(a)

Expert Solution

Answer to Problem 1Q

The distribution of net income of the company to the shareholders in return for their investment is the dividend.

Answer 9

(a)

Expert Solution

Answer 10

(a)

Expert Solution

Answer 11

Expert Solution

Answer 12

Explanation of Solution

The company provides return to its shareholders by paying a dividend which is out of the profit of the company. The payment of dividend can be either in cash or stock.
The dividend is paid according to the number of share of each shareholder. Preference shareholder receives a fixed rate of dividend but equity shareholders receive dividend only when there is a profit in the company.

Answer 13

Conclusion

Thus, the amount that shareholders receive in return of their investment is the dividend.

Answer 14

(b)

To determine

To explain: The payment of a dividend in cash or kind.

(b)

Expert Solution

Answer to Problem 1Q

It is not always compulsory that dividend must be paid in cash.

Explanation of Solution

The company provides return to its shareholders by paying a dividend which is out of the profit of the company.
Dividend in cash is paid only when the company has the surplus cash for distribution. Higher the profit, higher is the dividend and lower the profit lower is the dividend.
When the company does not have enough cash to distribute as a dividend it compensates the shareholders by repurchasing their shares. Buyback or repurchase of shares supports the share price during weak periods.
The payment of cash dividend should in such a way that it should not disturb company’s growth and expansion plans as well as its other cash payments.

Conclusion

Thus, the payment of dividend is not always in cash.

Answer 15

(b)

To determine

To explain: The payment of a dividend in cash or kind.

Answer 16

(b)

Expert Solution

Answer to Problem 1Q

It is not always compulsory that dividend must be paid in cash.

Answer 17

(b)

Expert Solution

Answer 18

(b)

Expert Solution

Answer 19

Expert Solution

Answer 20

Explanation of Solution

The company provides return to its shareholders by paying a dividend which is out of the profit of the company.
Dividend in cash is paid only when the company has the surplus cash for distribution. Higher the profit, higher is the dividend and lower the profit lower is the dividend.
When the company does not have enough cash to distribute as a dividend it compensates the shareholders by repurchasing their shares. Buyback or repurchase of shares supports the share price during weak periods.
The payment of cash dividend should in such a way that it should not disturb company’s growth and expansion plans as well as its other cash payments.