Practice Exercise #10-2

Date of record

This is the cut-off date that determines who will receive the dividend.

Cash dividend

The distribution of profit in the form of cash.

Date of distribution

The date on which the share dividend is received by the shareholders in the

form of share certificates.

Cumulative preference share

The holder of this share is entitled to receive the dividends in arrears.

Share dividend

The distribution of profit in the form of shares of stock.

Earnings per share

This is the amount that each share earned during the period.

Date of declaration

This is the date when the Board of Directors announces the issuance or payment of dividend which is worded as an official undertaking called board resolution.

Participating preference share

This entitles the holder the right to receive dividends on top of the fixed or

basic dividend of the preference share.

Book value per share

This is the amount that each share would receive assuming the corporation will

be liquidated today in an amount equal to its book value.

Large share dividend

A 20% share dividend declaration.