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Simply capital gain
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∙ 11y ago
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How does a payout of dividends effect the net income?
It shouldn't. Dividends are not considered an expense since stockholders are investing in the company. In return for investing, the company pays them but they are not employees.
What happens to dividends when a company does well?
The dividends increase.
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....!
Why would someone invest in a company that does not pay dividends?
An investor may choose to invest in a company without a dividend because the investor is looking to profit from the sale of this company's shares. They buy the stock at a low price and hope to sell it quickly at a higher price, and profiting from difference between these two prices (i.e. a capital gain).
Why investors want dividends?
The dividends are shares of profits the company makes
Why does the value of a share depend on dividends?
One of the most commonly made mistakes is that people relate the dividends paid to the financial health of the company. Let me say that more dividends paid does not mean comapny is doing good and vice versa. Generally, if the company pays less dividend because it requires that money for a new project which in turn will add to company growth. Thus stock price increases. If company does not have any new projects and still cut on dividends than stock price may go down. In short, if company can grow faster than the markets than it should give less dividends. However, if company is growing slower than the markets than it should give more dividends so that people can invest in markets and earn more. If comapny does not follow this logic than its stock price reduces.
What does Disney do with its money?
Pay dividends to its stockholders, pay salaries to its employees, pay taxes to various governments, make charitable donations, and invest some of it in company projects ... pretty much the same thing as any other company, really.
What are company dividends?
Company dividends are royalties payed to stock holders of a particular business. The amount of the dividend varies, depending on the company and the amount of stock owned.
Why are dividends important for a business?
Dividends are important because they provide a means to return a portion of a company's annual earnings to the shareholders (owners) of the company.
What is a stockholder's share of a company's profits?
Dividends
Stockholder's share of a company's profits?
dividends
Are dividends tax deductible?
Not to the company or the recepient.
