Dividend Policies and Decisions
Dividend policy determines the division of earnings among payments to stock holder's ad re-investment in the firm. Hence now it looks at the following aspects as:
i) How much to pay - in the four major alternative this encompassed for dividend policies.
ii) Whenever to pay - paying interim or final dividends
iii) Why dividends are paid - this is explained by the various theories which has to determine the relevance of dividend payment that is:
iv) How to pay - cash dividends or stock dividends.