The Board of Directors, by majority vote, decides on how much will be allocated for cash dividends from unrestricted retained earnings. In the case of stock dividends, aside from majority vote of the board, the approval of at least two-thirds of the outstanding capital is required in order to declare stock dividends. “Cancelled” dividends, on the other hand, indicates that the company, which has previously declared dividends, will no longer be paying the expected dividends. The distribution of cash dividends is anchored on the availability of cash. In the case of stock dividends, all formalities have to be complied with first, especially if there is a need to increase the capital stock.

Source: Philippine Star July 07, 2020 15:56 UTC