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A corporation's responsibilities include increasing shareholder value. Dividends can play an important role in this regard. A company has to decide what to do with excess cash on its books but there are several options. They could reinvest that money into the company. This could be purchasing new equipment, hiring on new employees, expanding into new regions, etc etc. They could use the money to aquire another company. They could pay off debt. They could buyback their own shares. Last but not least they could pay out a dividend or increase existing dividends. It all comes down to what is the best way to return value to shareholders. Most new companies do not pay dividends because their best use for cash is to grow their business. On the other hand many utility companies pay nice dividends due to the fact that it would be difficult to use that money to expand in that type of business. Therefor giving it back to the shareholders so that they may invest it however they may choose to makes more sense. When increasing a dividend a corporation may look at trying to set it at a sustainable level. Decreasing a dividend is usually considered a bad sign and shares tend to decrease in value. One last thing to consider is the tax environment. The lower the capital gains taxes are the more important a dividend becomes to the individual shareholders.
What else can I help you with?
What factors decide how much an actor is paid?
Usually, how much an actor gets paid is directly related to how much their contribution to the film will affect it's earning potential.
How much did the cast of Dance Moms get paid?
The Dance Moms dancers on the show don't get paid because they would be considered professional dancers, where they wouldn't be able to compete in dance competitions
You are considered salary non-exempt When there is no work do you still get paid for that day because you are salaried or do you have to use a vacation day to be compensated for that day?
as a salaried emplyee do i have to use vacation time to get paid if the office closes?
How much was Kate Gosselin get paid for being a nurse before she had children?
One opinion: 50,000 annually
How did the Duggar family earn enough to afford their children before TLC?
I think they owned property or buildings that people paid rent for.
What are the dividends paid on life insurance policies considered to be?
The dividends paid on life insurance policies by the insurer are called reversionary bonus which varies yoy.
What are dividends paid on life insurance policies considered to be?
The dividends paid on life insurance policies by the insurer are called reversionary bonus which varies yoy.
Are dividends a form of a business expense?
No they are considered earnings to be paid to stockholders.
Dividends are paid from?
Dividends are paid from corporate profits.
Dividends per share is equal to dividends paid....?
Dividends paid divided by the toal number of shares outstanding.
Are qualified dividends included in ordinary dividends?
Qualified dividends are a type of dividend that meets specific criteria set by the IRS, such as being paid by a U.S. corporation or certain foreign corporations. While qualified dividends are a subset of ordinary dividends, not all ordinary dividends are considered qualified.
What preference share is characterised by the property that should any dividends go unpaid those dividends must be paid before any future ordinary dividends?
cumulative preference share :)
How often are dividends paid?
Dividends are paid to shareholders by three types. They can either be paid annually, or biannually, or on quarterly basis.
A corporation gives out its profits as dividends paid to its?
Stockholders
To whom and how are dividends usually paid?
Dividends are usually paid to the investors of a company. These are paid on an annual or, more commonly, a quarterly basis.
What is preference share?
Preference shares are shares whose dividends are paid out first before ordinary shares dividends. They so called (preference shares) because they have 'preference' over ordinary shares for payment of dividends.
Are dividends paid out of retained earnings?
Yes, the amount of x dividends paid will reduce retained earnings by x.
