Sample Essay

Organizations that have operations on a bigger scale require more money for their operations. These organizations go public and they usually issue shares in order to fulfill their monetary issues and obligations. People buy shares and become the members of that organization. Public limited companies issues shares to the general public and organizations give dividends on those shares on annual or bi-annual basis. Thus, the phenomenon of shares and dividends work on this principle. In this paper we will discuss the phenomenon of distribution of shares and the element of share repurchases. Moreover, we will discuss practical examples of companies that give dividends and purchase their own shares. Similarly, the process of determining the disbursement of dividends is discussed in this paper.

Introduction

In an organization share holders are of utmost importance because they buyout the shares of the company and certain affairs of the company are carried out because of share holders. Therefore, organizations take care of their shareholders by giving them dividends. The profit of the company is either reinvested in the company or the share holders are given dividends. Usually, shareholders receive dividends with respect to their share holding in the company. However, giving dividends to the shareholders is a critical method and it is considered as the core decision making element of the company (Madura, 2008). Proper brainstorming and decision making capabilities is essential for in this process because through dividends shareholders are motivated more to invest in the company. There are certain forms of giving the dividends like dividends are distributed on cash basis and they are known as cash dividends. These dividends are distributed through checks and these are taxable in the recipient in the year when they are actually paid. Certain dividends are distributed in the form of additional shares and in certain cases dividends are given in the form of property and they are known as property dividends.

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