How Does Sandra Bass 'Cash Dividends Affect The Stockholders' Equity

Satisfactory Essays
A cash dividend is a cash payout from a stock. Investors receive a fraction of the issuing company’s retained earnings, based on the number of shares they own. A stock dividend is a payment in the form of additional shares. The company pays dividends in the form of additional shares of stock instead of cash. Companies usually distribute either kind of dividend to reward their stockholders’ since they are not required to pay or offer anything. Cash dividends affect the company’s retained earnings, which affects the stockholders’ equity. Stock Dividends does not affect the total stockholders’ equity. Stock dividends are transferred from Retained Earnings to Contributed Capital. Yes, the action that Sandra Bass has proposed is ethical.
Get Access