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It is that policy which has stable payout ratio.
By Parul Khanna
Stable Dividend Policy?
Stabile dividends have a positive impact on the market price of shares. If dividends are stable it reduces the chance of speculation in the market and investors desiring a fixed rate of return will naturally be attracted towards such securities. Stability of dividend means either a constant amount per shares or a constant percentage of net earnings.
pradeepkalari (pradeep sp)
What else can I help you with?
What is the concept of dividend policy in multinational firms?
concept of dividend policy
Advantages and disadvantages of dividend policy?
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.
The difference between a passive and an active 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.
A policy of dividend smoothing refers to?
setting a dividend price that does not necessarily conform with retained earnings
What are the features of dividend policy?
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.
Definition of stable dividend policy?
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.
One key advantage of a residual dividend policy is that it enables a company to follow a stable dividend policy is that true?
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.
What is small constant dividend per share plus extra 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.
What is the concept of dividend policy in multinational firms?
concept of dividend policy
Advantages and disadvantages of dividend policy?
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.
Which are the fluctuating dividend policies?
this policy is that policy which is fluctuating in nature and the shareholders do not generally go for this dividend policy.
What is dividend policy?
nd policy
The difference between a passive and an active 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.
How do you envisage your role as a Finance Manager in matters related to dividend policy What are the alternatives and factors that you may consider before finalizing your views on dividend policy?
as finance manager what is your role in matter of dividend policy.
What are the advantages and disadvantages of a stable dividend policy?
Stable dividend policy has following advantages: 1. It creates confidence among shareholders; 2. Stabilizes the market value of share of the company; 3. It helps in marinating the goodwill of the company; 4. Helps in giving regular income to the shareholders. Disadvantage: (well I am also looking for disadvantages so if anybody knows the answer then plz reply)
Does following the residual theory of dividends lead to a stable dividend?
The residual theory of dividends suggests that dividends should be paid from the remaining earnings after all profitable investment opportunities have been funded. This approach often results in fluctuating dividends, as the amount available for distribution can vary significantly based on investment needs and profitability. Consequently, companies following this theory may not provide a stable dividend policy, leading to inconsistencies that can affect investor expectations and stock prices. Stability in dividends typically requires a different approach, such as a target payout ratio or a stable dividend policy.
What are the disadvantages of a stable dividend policy?
A stable dividend policy can limit a company's financial flexibility, as it may constrain cash flow during periods of economic downturn or unexpected expenses, preventing the firm from reinvesting in growth opportunities. Additionally, maintaining a consistent dividend can create pressure to prioritize short-term earnings over long-term strategic investments, potentially hindering innovation. Furthermore, if a company faces challenges and has to cut dividends, it can negatively impact investor confidence and stock prices.
