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LSDefine
Simple English definitions for legal terms
asset dividend
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A quick definition of asset dividend:
An asset dividend is when a company gives its shareholders something other than money or stock as a dividend. This could be the company's product or property. A dividend is a portion of a company's earnings or profits that is distributed to its shareholders. It is usually given in the form of cash or additional shares. A dividend can also be declared but not yet paid, which is called an accumulated dividend. There are different types of dividends, such as cash dividend, stock dividend, and cumulative dividend.A more thorough explanation:
An asset dividend is a type of dividend that a company pays to its shareholders in the form of property, such as the company's product, instead of cash or stock. This is also known as a property dividend.
For example, if a company that produces cars pays an asset dividend, it may distribute cars to its shareholders instead of cash or stock. This means that the shareholders can either use the cars or sell them to make a profit.
Asset dividends are not very common, but they can be useful for companies that have excess inventory or assets that they want to distribute to their shareholders.