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 of the company. The investors [...]
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 Payment of Dividend: Source of [...]
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 treat retained earnings as the [...]