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Dividend warrant

Abhishek (CA FINAL) (54 Points)

16 May 2017

What is Dividend Warrant. Is it like a cheque?? Kindly explain me with example???

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Sudhir Todkar (CS Professional) (1021 Points)
Replied 16 May 2017

Dividend Warrant - an order of payment (such as a check payable to a shareholder) in which a dividend is paid

bill of exchange, draft, order of payment - a document ordering the payment of money; drawn by one person or bank on another

Dividend is the part of profits payable to the owners of the company i.e., Shareholders. Some companies issues warrants to its shareholders instead of paying dividends in the form of cash in the form of document by mentioning the Warrant Price and other details.

The price mentioned in it is also called exercise price. Some times company may not specify the name of the holder. The holder of the document can fill it.

Advantages: It helps to the issuing company from paying the Tax.

It is easy to transfer from one person to other without any formalities

It helps to increase the share/capital of the company.

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