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Top 13 Determinants of Dividend Policy | Financial Management

This article throws light upon the top thirteen determinants of dividend policy. The determinants are: 1. Legal Restrictions 2. Magnitude and Trend of Earnings 3. Desire and Type of Shareholders 4. Nature of Industry 5. Age of the Company 6. Future Financial Requirements 7. Government’s Economic Policy 8. Taxation Policy 9. Inflation 10. Control Objectives […]

Meaning and Types of Dividend Policy | Financial Management

After reading this article you will learn about the Meaning and Types of Dividend Policy. Meaning of Dividend Policy: The term dividend refers to that part of profits of a company which is distributed by the company among its shareholders. It is the reward of the shareholders for investments made by them in the shares […]

2 Main Concepts of Dividend | Financial Management

This article throws light upon the two main concepts of dividend. The concepts are: 1. The Irrelevance Concept of Dividend 2. The Relevance Concept of Dividend. Concept # 1. The Irrelevance Concept of Dividend: A. Residual Approach: According to this theory, dividend decision has no effect on the wealth of the shareholders or the prices […]

Legal and Procedural Aspects of Payment of Dividend

This article throws light upon the top four legal and procedural aspects of payment of dividend. The legal and procedural aspects are: 1. Source of Declaring Dividend 2. Transfer to Reserves 3. Declaration of Dividend out of Past Profits or Reserves 4. Other Provisions and Aspects of Payment of Dividend. Legal and Procedural Aspects of […]

Dividend Policy in Practice (With Calculations)

The main consideration in determining the dividend policy is the objective of maximisation of wealth of shareholders. Thus, a firm should retain the earnings if it has profitable investment opportunities, giving a higher rate of return than the cost of retained earnings, otherwise it should pay them as dividends. It implies that a firm should […]

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