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Does shareholders can pay large dividend to only one shareholders for ordinary shares?
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Why does IPO underpricing tend to occur?
Underpricing occurs when additional shares are to be issued for companies with securities already publicly traded, to aid in the market's reception of the securities, and in large secondary offerings.
Why were corporations better for large businesses than partnerships?
Corporations could continue to exist after managers died. Corporations could quickly raise money by selling shares of stock. Corporations can grow much faster.
What are the differences between foreign exchange market and equity market?
Foreign exchange (forex) is the global market of currency (money) , equity market (stock market) is the global market of shares (small pieces of large companies)
Meaning and factors effecting dividend policy?
A dividend policy is a company's approach to distributing profits back to its owners or stockholders. If a company is in a growth mode, it may decide that it will not pay dividends, but rather re-invest its profits (retained earnings) in the business. If a company does decide to pay dividends, it must then decide how often to do so, and at what rate. Large, well-established companies often pay dividends on a fixed schedule, but sometimes they also declare "special dividends." The payment of dividends impacts the perception of a company in financial markets, and it may also have a direct impact on its stock price. From-Gudlu Mohanty....!
How much is a 1928 penny worth?
United Kingdom1928 pennies were struck in very large numbers during George V's reign. If in ordinary circulated condition then maybe 20 - 30p. If in mint state i.e. with original red lustre they can fetch £30 - £40. Correct as at 22 March 2012
How many shareholders does Apple Inc have?
There are 917 million Apple shares available for trading. Individuals and institutions can hold blocks of these shares so it is not known how many shareholders there are.
Is high cost of capital good?
No. A high cost of capital is very expensive for an enterprise.Shares are a very high cost of capital as shareholders expect large dividend annually.
What r the different types of shares?
There are two types of Shares 1. Equity Share 2. Preference Share Some times, if company earns large amount of profit, instead of giving dividend to the shareholder, it gives "Bonus Shares"
Factor affecting dividend policy?
Dividend DecisionDividendMeaning: Dividend is that part of the profits of a company which is distributed amongst its shareholders.Definition: According to ICAI, "Dividend is a distribution to shareholders out of profits or reserves available for this purpose."Nature of Dividend DecisionThe dividend decision of the firm is crucial for the finance manager because it determines:1. the amount of profit to be distributed among the shareholders, and2. the amount of profit to be retained in the firm.There is a reciprocal relationship between cash dividends and retained earnings.While taking the dividend decision the management take into account the effect of the decision on the maximization of shareholders' wealth.Maximizing the market value of shares is the objective.Dividend pay out or retention is guided by this objective.Dividend PolicyFactors Affecting Dividend Policy:1. External Factors2. Internal FactorsExternal Factors Affecting Dividend Policy1. General State of Economy:In case of uncertain economic and business conditions, the management may like to retain whole or large part of earnings to build up reserves to absorb future shocks.In the period of depression the management may also retain a large part of its earnings to preserve the firm's liquidity position.In periods of prosperity the management may not be liberal in dividend payments because of availability of larger profitable investment opportunities.In periods of inflation, the management may retain large portion of earnings to finance replacement of obsolete machines.2. State of Capital Market:Favourable Market: liberal dividend policy.Unfavourable market: Conservative dividend policy.3. Legal Restrictions:Companies Act has laid down various restrictions regarding the declaration of dividend:Dividends can only be paid out of:** Current or past profits of the company. Money provided by the State/ Central Government in pursuance of the guarantee given by the Government.Payment of dividend out of capital is illegal.A company cannot declare dividends unless:** It has provided for present as well as all arrears of depreciation. Certain percentage of net profits has been transferred to the reserve of the company.Past accumulated profits can be used for declaration of dividends only as per the rules framed by the Central Government4. Contractual Restrictions:Lenders sometimes may put restrictions on the dividend payments to protect their interests (especially when the firm is experiencing liquidity problems)Example:A loan agreement that the firm shall not declare any dividend so long as the liquidity ratio is less than 1:1.The firm will not pay dividend more than 20% so long as it does not clear the loan.Internal Factors affecting dividend decisions1. Desire of the Shareholders:Though the directors decide the rate of dividend, it is always at the interest of the shareholders.Shareholders expect two types of returns:[i] Capital Gains: i.e., an increase in the market value of shares.[ii] Dividends: regular return on their investment.Cautious investors look for dividends because,[i] It reduces uncertainty (capital gains are uncertain).[ii] Indication of financial strength of the company.[iii] Need for income: Some invest in shares so as to get regular income to meet their living expenses.2. Financial Needs of the Company:If the company has profitable projects and it is costly to raise funds, it may decide to retain the earnings.3. Nature of earnings:A company which has stable earnings can afford to have an higher divided payout ratio4. Desire to retain the control of management:Additional public issue of share will dilute the control of management.5. Liquidity position:Payment of dividend results in cash outflow. A company may have adequate earning but it may not have sufficient funds to pay dividendsStability of DividendsThe term stability of dividends means consistency in the payment of dividends. It refers to regular payment of a certain minimum amount as dividend year after year.Even if the company's earnings fluctuate from year to year, its dividend should not. This is because the shareholders generally value stable dividends more than fluctuating ones.Stable dividend can be in the form of:1. Constant dividend per share2. Constant percentage3. Stable rupee dividend plus extra dividendSignificance of Stability of Dividend1. Desire for current income2. Sign of financial stability of the company3. Requirement of institutional investors4. Investors confidence in the companyDanger of Stable Dividend PolicyStable dividend policy may sometimes prove dangerous. Once a stable dividend policy is adopted by a company, any adverse change in it may result in serious damage regarding the financial standing of the company in the mind of the investors.Forms of Dividend1. Cash Dividend:The normal practice is to pay dividends in cash.The payment of dividends in cash results in cash outflow from the firm. Therefore the firm should have adequate cash resources at its disposal before declaring cash dividend.2. Stock Dividend:The company issues additional shares to the existing shareholders in proportion to their holdings of equity share capital of the company.Stock dividend is popularly termed as 'issue of bonus shares.'This is next to cash dividend in respect of its popularity.3. Bond Dividend:In case the company does not have sufficient funds to pay dividends in cash it may issue bonds for the amount due to shareholders.The main purpose of bond dividend is postponement of payment of immediate dividend in cash. The bond holders get regular interest on their bonds besides payment of the bond money on the due date.[Bond dividend is not popular in India]4. Property Dividend:This is a case when the company pays dividend in the form of assets other than cash. This may be in the form of certain assets which are not required by the company or in the form of company's products.[This type of dividend is not popular in India]Bonus SharesWhen the additional shares are allotted to the existing shareholders without receiving any additional payment from them, is known as issue of bonus shares.Bonus shares are allotted by capitalizing the reserves and surplus.Issue of bonus shares results in the conversion of the company's profits into share capital. Therefore it is termed as capitalization of company's profits.Since such shares are issued to the equity shareholders in proportion to their holdings of equity share capital of the company, a shareholder continues to retain his/ her proportionate ownership of the company.Issue of bonus shares does not affect the total capital structure of the company. It is simply a capitalization of that portion of shareholders' equity which is represented by reserves and surpluses.It also does not affect the total earnings of the shareholders
What is a corporate business?
Mostly Large scale organisations are corporation, another name for corporation can be 'company' it is owned by shareholders and aims to make a profit. Shares in a public company are usually traded on the Australian Securities Exchange (ASX). Members of the public company are able to buy or sell shares in public companies and such companies have millions of shareholders. BHB Billiton and Telstra are examples of public companies. Private corporations are not listed on the Australian Securities Exchange and have restrictions on who can buy shares. They can have one shareholder but no more than 50 shareholders.
What is true of public corporations?
Public corporations are owned by shareholders who can buy and sell stock freely on the open market. They must adhere to strict regulatory requirements, such as financial reporting and disclosure obligations. Public corporations often have a large number of shareholders and are typically managed by a board of directors elected by the shareholders.
What are bonus shares?
Concept: When a company has accumulated large reserves which cannot be disrtibuted as dividents in cash either due to legal restrictions or accounting principle f prudence, it converts this surplus capital & divides the capital among the existing shareholders according to the share capital held by issuing fully paid bonus shares. NOTEWORTHY POINTS: 1. The share of bonus shares soes not constitute a source of income to the company or the financial position of the company remains the same. 2. Issue of bonus shares is not for sistribution of profits among the shareholders and hence not for income tax purpose. 3. Are not a gift. 4. The issue of bonus share does not improve the well being or financial position of the shareholders even though no cash is paid by them to acwire these shares...
What is a stock tender offer?
A tender offer is a offer made to shareholders of record to buy their shares at a specific price during a specific amount of time. A company's shareholders are publicly notified of such an offer and decide if they would like to submit their shares to the offering party. The offering party will typically have a set number of shares they are trying to purchase. Tender offers typically occur when a party wishes to take over a company or at least take a large stake in a company. Buying a large number of shares in the open market could artificially push up the price of the shares. To avoid this the offerer is setting a price they are willing to pay and getting them all at once. Another common use of a tender offer is when the corporation wishes to buy its own stock back in a large share repurchase plan. Microsoft is a recent example of this process.
Do the shareholders decide who will be the CEO?
The board of directors, who are supposed to represent the owners/shareholders appoint the CEO. Ownership/shareholding of large public companies tends to be fragmented so only large shareholders may have some say.
What are bonues?
Concept: When a company has accumulated large reserves which cannot be disrtibuted as dividents in cash either due to legal restrictions or accounting principle f prudence, it converts this surplus capital & divides the capital among the existing shareholders according to the share capital held by issuing fully paid bonus shares. NOTEWORTHY POINTS: 1. The share of bonus shares soes not constitute a source of income to the company or the financial position of the company remains the same. 2. Issue of bonus shares is not for sistribution of profits among the shareholders and hence not for income tax purpose. 3. Are not a gift. 4. The issue of bonus share does not improve the well being or financial position of the shareholders even though no cash is paid by them to acwire these shares...
Who owns the company Texas Instruments?
Texas Instruments is a publicly-traded corporation. It is owned by millions of shareholders, either directly or through mutual funds. Many companies are publicly traded. In each case, there are majority shareholders, often the company itself, so-called 'parent' companies, or corporations that have deliberately set out to purchase a majority of shares for various reasons having to do with profitability. When a company starts out, the majority shareholders are the founders of the company. Then, when the company goes public, the founders usually retain a very strong position in the company, with strong blocks of voting shares and/or preferred shares that pay interest or a dividend. At any time, other wealthy individuals or companies may purchase large numbers of shares in order to gain a majority vote that does not depend upon proxy voting in shareholders' meetings. In almost every case, there remains a majority shareholder, holding the decision-making balance of votes and hence control over and the largest profit share of a publicly traded company. When this occurs, the majority shareholder is regarded as the company's majority owner, even though each holder of a single share owns a little piece of the company. Perhaps the question may be re-worded to avoid confusion by asking, "Who or what owns the majority of shares in Texas Instruments?"
What Is the definition of Public Cooperation?
public cooperation means the companies shares are publicly traded. They are held by a large number of shareholders... usually hundreds or thousands. The British term for this would be pubic limited company, an example of this would be Nat west.
