Question

"Distributions to Shareholders" Please respond to the following: * From the e-Activity, contrast the differences between a stock dividend and a stock split. Imagine that you are a stockholder in a company. Determine whether you would prefer to see the company that you researched declare a 100% stock dividend or declare a 2-for-1 split. Provide support for your answer with one (1) real-world example of your preference. *

From the scenario, examine the dividend rate that TFC is paying in order to determine if the company should receive a rate adjustment. Suggest whether TFC’s dividends should either (1) stay the same; (2) be increased; (3) or go down. Provide a rationale for your response.

Answer 1

Stock dividends are somewhat like cash dividends, but instead of cash a company pays out of stock. As a result, the company’s shares will increase, and the company’s stock price will decrease. Stock splits happen when a company notices that the stock price may be to high. Stock splits are usually done to increase liquidity to the stock and make it more affordable for investors to buy regular lots (lots meaning 100 shares). Companies usually tend to keep their stock price within an ideal trading range.

I have 100 shares on in Simmons First National Corporation, is a financial holding company registered under the Bank Holding Company Act of 1956. As on 02/09/2018 they distributed 2 for 1 shares , announcement was made in 18/01/2018. And at the same time company issued cash dividend also , the chairman and CEO of company said that The event should adjust the price of the company’s stock to a level that is extremely attractive to a wide range of investors, which we believe will ultimately result in an increase in the stock’s liquidity and marketability.

TFC (TCF financial corp) , from 2015 they maintains stable rate of dividend.the last event on 14/11/2017 paid USD 0.075 but now they announced USD 0.15 dividend ,this is quite good I think because the investors are talking about their ability and performance, since last 2 to 3 years they maintained same rate of dividend , the increase in rate will cause a favourable opinion about company performance and strength .