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concept of dividend policy
The difference between a passive and an active dividend policy lies in the amount of time between dividend disbursement. In a passive dividend policy, dividends are given when the company decides it is time. With an active dividend policy, dividends are disbursed at regular intervals.
setting a dividend price that does not necessarily conform with retained earnings
Dividend policy is the set of rules a business uses to determine how much of its earnings will go to shareholders. Features include equity, income, expenses and overall profit.
The advantages of dividend policies are that they provide an outline of what the investor can expect from the company regardless of what the policy is. Stable dividends are typically preferred over fluctuating dividends. The main disadvantage of dividend policies is that is they are too generous, the company may struggle and if they attempt to reduce the dividend then investor's can become disenchanted as it is considered a cut in pay.
Dividends are deducted of the retained earnings which is part of the contributed capital and that must be done according to the dividends policy The dividend policy of a firm relates to management's propensity to distribute earnings to stockholders.
concept of dividend policy
Dividend policies are concerned with the financial policies that have to do with how, when, and how much regarding paying cash dividend. Dividend policy theories explain the reasoning and arguments that relate to paying dividends by firms Dividend theories include the dividend irrelevance theory that indicates there is no effect on the capital structure of a company or its stock price from dividends.
this policy is that policy which is fluctuating in nature and the shareholders do not generally go for this dividend policy.
The proportion of profit paid to share holders is not fixed it depends on company policy as well as situation as well if company has feasible investing opportunities then it will opt for no dividend or if no opportunity then it may opt for even 100% dividend to shareholders.
nd policy
The difference between a passive and an active dividend policy lies in the amount of time between dividend disbursement. In a passive dividend policy, dividends are given when the company decides it is time. With an active dividend policy, dividends are disbursed at regular intervals.
Dividend policy is a set of rules that a company uses to determine how much of its earnings it will pay to shareholders. Stable dividend policy means all payments are equal.
as finance manager what is your role in matter of dividend policy.
A policy of paying a low regular dividend plus a year-end extra in good years is a compromise between a stable dividend and a constant payout rate.This policy gives the firm flexibility.
No, that statement is not true. A residual dividend policy does not aim to maintain a stable dividend, but instead distributes dividends based on the residual earnings left after the company has financed all capital projects and met its financial obligations. This means that the dividend amount can vary depending on the company's earnings and cash flow, rather than following a stable dividend policy.
setting a dividend price that does not necessarily conform with retained earnings