this policy is that policy which is fluctuating in nature and the shareholders do not generally go for this dividend policy.
A stable dividend refers to a consistent and predictable payout of earnings to shareholders, typically expressed as a fixed amount per share. Companies that offer stable dividends prioritize returning value to investors and often have reliable cash flows. This approach can attract income-focused investors, as it indicates financial health and a commitment to shareholder returns. Stable dividends are usually associated with mature, well-established companies.
A postmortem dividend is a payment made to the beneficiaries of a life insurance policy or an estate after the policyholder has passed away. It typically represents the accumulated dividends or profits that were not distributed during the policyholder's lifetime. This dividend is usually paid out as part of the claims process, after the necessary documentation is submitted to the insurance company or estate executor. The amount is determined based on the policy’s terms and the insurer's performance.
Shareholders who prioritize capital gains over immediate income typically have no interest in dividend policy. These investors focus on the company's growth potential and value appreciation rather than regular dividend payouts. Additionally, firms in high-growth sectors, like technology, often attract investors who prefer reinvested earnings to fuel expansion instead of distributing dividends.
Dividend policy can significantly influence corporate performance as it reflects a company's financial health and management's outlook on future growth. A consistent and attractive dividend can enhance shareholder value, attract investors, and signal confidence in earnings stability. Conversely, a high dividend payout may limit funds available for reinvestment, potentially hindering long-term growth. Ultimately, the impact varies based on industry norms, market conditions, and individual company circumstances.
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.
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)
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.
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.
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.
It is that policy which has stable payout ratio.By Parul KhannaStable 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)
concept of dividend policy
this policy is that policy which is fluctuating in nature and the shareholders do not generally go for this dividend policy.
nd 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.
as finance manager what is your role in matter of dividend policy.
setting a dividend price that does not necessarily conform with retained earnings