Identify and Discuss the Three Major Structural Options for Distribution

question 66

Essay

Identify and discuss the three major structural options for distribution. In your answer, identify the major advantages and disadvantages of each option.

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Definitions:

Cash Dividend

A Cash Dividend is a payment made by a company out of its earnings to investors in the form of cash.

Net Income

The total profit of a company after all expenses and taxes have been subtracted from revenues.

Common Stock

A type of security that represents ownership in a corporation, entitling the owner to vote at shareholders' meetings and receive dividends.

Outstanding

Refers to shares that are currently owned by investors, including public shareholders, company officials, and insiders.