Home › Finance Formulas › Discounted Cash Flow Formula › Financial Modeling Quick Lesson Building Cash Flow Formula Model Part Statement Problems Valuation Flows Indirect Method Analysis What Ebitda Terminal Value Calculation Definition

Finance Formulas / July 11, 2018 / Heaven Estes

A dividend is allocated as a fixed amount per share, with shareholders receiving a dividend in proportion to their shareholding. For the joint-stock company, paying dividends is not an expense; rather, it is the division of after-tax profits among shareholders. Retained earnings (profits that have not been distributed as dividends) are shown in the shareholders' equity section on the company's balance sheet - the same as its issued share capital. Public companies usually pay dividends on a fixed schedule, but may declare a dividend at any time, sometimes called a special dividend to distinguish it from the fixed schedule dividends. Cooperatives, on the other hand, allocate dividends according to members' activity, so their dividends are often considered to be a pre-tax expense.

Continuous compounding is the mathematical limit that compound interest can reach if it's calculated and reinvested into an account's balance over a theoretically infinite number of periods. While this is not possible in practice, the concept of continuously compounded interest is important in finance. It is an extreme case of compounding, as most interest is compounded on a monthly, quarterly or semiannual basis.

77 out of 100 based on 472 user ratings

We Also Think Youâ€™ll Like

Knowingpains

Category

© 2018 Knowingpains. All rights reserved