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The primary purpose of the firm is to pay dividend for the share holders Therefore irrespective of the firm's need and desires of share holders a firm should follow a policy of very high dividend pay?
Wiki User
∙ 16y ago
This is a false premise. Shareholders may invest in a company that has NEVER paid a dividend and never expect to collect a dividend; they only expect to recover the investment in other ways, such as the appreciated stock value.
A company can certainly retain earnings to re-invest in itself, as for research and development, expansion into new markets, or even to re-purchase issued and outstanding shares, all for the "good of the company" as determined by the board of directors.
Wiki User
∙ 16y ago
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Difference between preference share and equity share?
1)Preference Shares have 2 preferences first payment of dividend in every year in which dividend is proposed & first share capital of preference shares will be payab;e @ winding up or liquidation of the company,where as equity share holders dividend after preference share holders & even share capital capital is also paid after paying to preference share holders. 2)preference share holders are not owners of the company and do not enjoy any voting right. Where as Equity Shares has voting right & they are the real owners of company. 3)Preference Shares have a finite tenure and carry a fixed rate of dividend where as dividend to equity shares is payable rest of the dividend payable after preference share holders.
The cumulative feature of preferred stock?
Preferred shares are entitled to the promised dividend, regardless of the company's dividend policy. If the company chooses not to pay a dividend in a given quarter, the amount owed accumulates and must be paid to the holders of the preferred shares before any dividends are paid to common shareholders. The payment is, therefore, cumulative over time if not paid.
What is a dividend rate?
Dividend rate is defined as a % when compared to the face value of a stock. Dividend is nothing but periodic sharing of profit by public limited companies with its share holders. Assuming a stock with a face value of Rs. 10/- declares a dividend of Rs. 5/- per share then dividend rate would be 50%
What is the meaning of dividend initiation?
First announcement by a firm of an ordinary, taxable, cash dividend payable at the quarterly, semi-annual, or annual frequency to holders of ordinary common stock.
What is meaning of dividend?
A monetary gain on an investment, much like earning interest on a bank account. Credit Unions typically use "dividend" instead of "interest" in their various accounts."dividend is given from the profit earn by the company to the share holders of the company" simply telling "dividend is the part of the profit"
What is the difference between proposed and declared dividend?
Proposed dividend is that which is proposed by the management to be paid to share holders of company.Declared dividend is the dividend which is finalized in annual general meeting to be paid to share holders.
How do companies give dividend to share holders. In the course of buying and selling who will become the dividend holder?
Anyone who buys it on this day will receive the div,idend, whereas any holders selling the stock lose their right to the dividend. After this date the stock becomes ex dividend. -Its in my view
Difference between preference share and equity share?
1)Preference Shares have 2 preferences first payment of dividend in every year in which dividend is proposed & first share capital of preference shares will be payab;e @ winding up or liquidation of the company,where as equity share holders dividend after preference share holders & even share capital capital is also paid after paying to preference share holders. 2)preference share holders are not owners of the company and do not enjoy any voting right. Where as Equity Shares has voting right & they are the real owners of company. 3)Preference Shares have a finite tenure and carry a fixed rate of dividend where as dividend to equity shares is payable rest of the dividend payable after preference share holders.
The cumulative feature of preferred stock?
Preferred shares are entitled to the promised dividend, regardless of the company's dividend policy. If the company chooses not to pay a dividend in a given quarter, the amount owed accumulates and must be paid to the holders of the preferred shares before any dividends are paid to common shareholders. The payment is, therefore, cumulative over time if not paid.
Details about dividend policy?
A dividend is nothing but a periodic sharing of profit by the company with its share holders. The dividend is usually declared as a % of the face value of the share. A 100% dividend on a share with a face value of 1$ means you would get $1 for every share of that company you hold.
What is a dividend rate?
Dividend rate is defined as a % when compared to the face value of a stock. Dividend is nothing but periodic sharing of profit by public limited companies with its share holders. Assuming a stock with a face value of Rs. 10/- declares a dividend of Rs. 5/- per share then dividend rate would be 50%
What is the meaning of dividend initiation?
First announcement by a firm of an ordinary, taxable, cash dividend payable at the quarterly, semi-annual, or annual frequency to holders of ordinary common stock.
Which stock pays dividends and holders have voting rights?
preference shareholder can get dividend on fixed based and preference shareholder not have voting rights and equity share holder has right to vote and to get dividend
What is meaning of dividend?
A monetary gain on an investment, much like earning interest on a bank account. Credit Unions typically use "dividend" instead of "interest" in their various accounts."dividend is given from the profit earn by the company to the share holders of the company" simply telling "dividend is the part of the profit"
Does stock that pays special dividend always go down by the amount of the dividend?
The ex-dividend date is the day after which all shares bought and sold no longer come attached with the right to be paid the most recently declared dividend. This is an important date for any company that has many stockholders, including those that trade on exchanges, as it makes reconciliation of who is to be paid the dividend easier. Prior to this date, the stock is said to be cum dividend ('with dividend'): existing holders of the stock and anyone who buys it will receive the dividend, whereas any holders selling the stock lose their right to the dividend. On and after this date the stock becomes ex dividend: existing holders of the stock will receive the dividend even if they now sell the stock, whereas anyone who now buys the stock now will not receive the dividend. It is relatively common for a stock's price to decrease on the ex-dividend date by an amount roughly equal to the dividend paid. This reflects the decrease in the company's assets resulting from the declaration of the dividend. However it must be emphasised that there is no direct link between the price and the dividend, this price movement is simply a result of market action. To sum up the date a dividend is paid is not the date a stock usually goes down but rather the date that the stock purchase no longer includes the dividend. This in no way is a guarentee a stock could be up considerably that day based on market conditions and a number of other things even with the downward pressure of no longer being able to receive that dividend.
Is dividends Payable an asset?
Dividend payable is the amount which is payable by the company to share holders so it is a liability of company and not an asset.
Why do you need CD holders?
If you did not have CD holders, the CD would become dirty and scratched, therefore making the CD unreadable.
