Guam Dividend Equivalent Shares, also known as GOES, are a specialized investment instrument that allows investors to replicate the financial benefits and cash flows of owning dividend-paying stocks listed on the Guam Stock Exchange. GOES are designed to provide a similar return on investment as regular shares, particularly dividends, while allowing investors to hedge against potential risks associated with owning the actual shares. These shares, commonly issued by financial institutions and brokerage firms operating in Guam, are designed specifically for individuals and corporations interested in gaining exposure to the Guam equity market. As the name suggests, GOES provide shareholders with a dividend equivalent to the cash dividend amount that would have been received if they had directly held the underlying stocks. By owning GOES, investors benefit from the dividend income stream without the need to purchase and hold individual shares. This can be particularly advantageous for investors who prefer a more liquid and diversified approach to investing in Guam's stock market, while also potentially mitigating certain administrative and tax complexities associated with direct ownership. There are various types of Guam Dividend Equivalent Shares available to investors, offering different features and requirements. Some common types include: 1. Traditional GOES: These shares emulate the dividends received from a targeted Guam-listed stock and provide a proportional income stream to shareholders. 2. Index-based GOES: These shares replicate the dividend income from an entire index or a predetermined basket of stocks, providing investors with exposure to a broader market segment rather than individual companies. 3. Customizable GOES: These shares allow investors to tailor the characteristics of their investment based on their specific requirements, such as selecting specific stocks or sectors they wish to gain dividend exposure to. 4. Leveraged GOES: These shares amplify the dividend returns by utilizing leverage techniques, magnifying potential gains or losses for investors. It's important for potential investors to carefully review the terms and conditions of each specific GOES offering, including factors such as fees, liquidity, and any potential risks associated with the underlying stocks. Consulting with a qualified financial advisor is strongly recommended before investing in GOES or any other financial instrument.
Guam Dividend Equivalent Shares
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Cash dividends are paid out of a company's retained earnings, the accumulated profits that are kept rather than distributed to shareholders. The correct journal entry post-declaration would thus be a debit to the retained earnings account and a credit of an equal amount to the dividends payable account.
There is no separate balance sheet account for dividends after they are paid. However, after the dividend declaration but before actual payment, the company records a liability to shareholders in the dividends payable account.
Where the dividend represents a return on a parent's investment in a subsidiary (rather than a return of its investment), the dividend will usually be credited to the profit and loss account.
To record a dividend, a reporting entity should debit retained earnings (or any other appropriate capital account from which the dividend will be paid) and credit dividends payable on the declaration date.
Cash dividends are paid out of the company's retained earnings, so the journal entry would be a debit to retained earnings and a credit to dividend payable.
Holders of RSUs have no voting rights nor do they receive any dividends paid. Some companies may elect to pay dividend equivalents. For example, they may let dividends accrue and allocate those funds to cover some of the taxes due at vesting. Usually, vesting halts if the employee is terminated.
A dividend equivalent payment is treated as a dividend from sources within the United States. ingly, the dividend is subject to the flat 30-percent withholding tax (or lower withholding tax rate, if provided for by a treaty) if received by a nonresident alien or foreign corporation (IRC § 871(m); Reg. §1.881-2).
A dividend equivalent right entitles the recipient to receive credits equal to the cash or stock dividends or other distributions that would have been received on shares of stock had the shares been issued and outstanding on the dividend record date.
