Final answer:
The SMA (Special Memorandum Account) receives dividends from stocks held on margin, which can increase the investor's buying power. Policies on dividend management may vary by brokerage firm.
Step-by-step explanation:
The SMA (Special Memorandum Account) will be credited with dividends when a stock held within a margin account pays out dividends. The SMA is a line of credit that a brokerage firm provides to its clients trading on margin.
When dividends are received for the stock held in margin, they are typically credited to this account, potentially increasing the buying power of the investor. However, different brokerage firms may have varying policies on how dividends are handled, so it's always a good idea for investors to review these policies with their specific broker.