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Bond Dividend

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Stock Dividend
A dividend that is paid in stock or bonds rather than cash. A stock dividend may be declared when the company is cash poor and cannot afford a dividend otherwise. They are generally not considered desirable because one must pay capital gainstax on stock dividends, even though there is no cash gain for the shareholder. It is also called a scrip dividend. See also: Payment-in-kind bond.

bond dividend
A type of liability dividend paid in the dividend payer's bonds.


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Franklin introduced its first municipal bond fund, Franklin Tax-Free Income Fund, in 1977, following the passage of the federal Tax Reform Act of 1976, which altered the rules regarding taxation of municipal bond dividends to allow mutual fund income derived from tax-free securities to be "passed through" to fund shareholders and remain tax-free.
 
 
 
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