Why do companies issue liquidating dividends

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Although it is seldom the most tax efficient way to dispose of a company, this route is often forced on the vendor because the purchaser refuses to buy the shares instead, for the reasons already explained earlier in this section.

Once the assets of the business have been sold by the company, and it has paid the resulting corporation tax on its gains, we are left with what is sometimes known as a “cash-box” company – that is, a company whose only asset is a large bank balance.

He also advocates for a more concentrated, pure approach to factor investing, which listeners know is music to my ears." [audio]"We've seen this act before.

If you didn't own the nifty 50 stocks in the early 1970s, you underperformed and, thus, money continued to go into them.

These payments can be issued to stockholders if a company claims bankruptcy or when company management sells off the assets of the company upon liquidation and subsequently passes the proceeds on to the company's shareholders.

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Steve and Jane decide to get the cash out of the company.

Given the current popularity of factor investing it seems a good time to review what happened that summer and discuss its relevance for today.""Lots of you will already be familiar with Wes Gray, and those of you who are not are in for a treat.

Wes is the founder of Alpha Architect, a firm which manages quantitative equity strategies for clients using factors like value and momentum.

For instance, a company with a "nominal capital" of £1,000 represented by 1,000 shares may be sold for £200,000, in which case those 'nominal' £1 shares would have a 'real' value of £200 each.

Dividend is a payment made to the shareholders of a company in proportion to the number of shares held.

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