Dividends are the proportion of earnings distributed to the shareholders. Dividend can be paid in several forms i.e. Cash Dividend and Stock Dividend. The commonly used dividends are as follows :

  1. Cash dividend
  2. Scrip dividend
  3. Bond  dividend
  4. Stock Dividend
  5. Property  dividend

    Types of Dividend
  6. Liquidating Dividend

1. Cash Dividend:

Cash dividend is the most common and preferable form of dividend. This type of dividend can be paid via electronic fund transfer or printed paper cheque. This dividend are reimbursed to the shareholders against their investment and commonly is a taxable income. Dividend paid to the shareholders are not the expenses of the company, rather a deductions of retained earnings.

It is paid periodically  out the business  concerns  EAIT (Earnings after interest and tax). Cash dividends  are common  and popular  types followed by majority  of the business  concerns.

2. Stock Dividend

Stock dividend  is paid in the  form  of the  company  stock  due  to raising  of more  finance. Under  this  type,  cash  is retained by the  business  concern. Stock dividend  may be bonus issue. This  issue is given only to the existing  shareholders of the business  concern.

3. Bond Dividend

Bond dividend  is also known as script  dividend.  If the company  does not   have sufficient funds  to pay  cash  dividend,  the  company  promises  to pay  the  shareholder at  a future specific date with  the help of issue of bond or notes.

4. Property Dividend

Property dividends  are paid in the form of some assets other  than  cash. It will distributed under  the exceptional circumstance. This  type of dividend  is not  published  in India.