Types of dividend policy, Financial Management

TYPES OF DIVIDEND POLICY

1. Regular dividend policy: Payment of dividend at standard rate is known as regular dividend policy.

2. Stable dividend policy: Payment of fixed minimum amount of dividend regularly is known as stable dividend policy.  This may take the form of one of the following forms.

Constant dividend per share:  Fixed dividend per share is paid irrespective of earnings year after year and a reserve for dividend equalization is created to cover the fluctuations in earnings.

Constant Payout Ratio (P/O):  Under Constant Payout Ratio policy, a predetermined percentage of earnings is paid as dividend every year.

Stable rupee dividends plus extra dividend:  Under Stable rupee dividends plus extra dividend technique, a constant low dividend per share is paid, with an extra dividend in years of high profits.

3. Irregular dividend policy:

Under Irregular dividend policy, dividend payment is irregular.  The dividend policy depends on so many other factors which may have a direct impact on the availability of funds in the company.

4. No dividend policy:

Under No dividend policy, the company has a policy of not paying dividend to any share holder.

Posted Date: 10/16/2012 1:19:57 AM | Location : United States







Related Discussions:- Types of dividend policy, Assignment Help, Ask Question on Types of dividend policy, Get Answer, Expert's Help, Types of dividend policy Discussions

Write discussion on Types of dividend policy
Your posts are moderated
Related Questions
I need a report on the topic Investment of Surplus Cash. Can you please assist me for Investment of Surplus Cash report for about 2000 words?

Repo rates vary from transaction to transaction. They depend upon a variety of factors like: Collateral's quality Repo term

Lenders in the US insist upon some kind of mortgage insurance. There are broadly two types of mortgage insurance - one is

Q. Cost of capital? The terms of cost of capital refers to the minimum rate of the return a firm must earn on its investment so that the market value of the company equity shar

Dividend Payout Ratio The percentage of earnings or profit paid to shareholders in dividends. Computed as:   The payout ratio gives an idea about how well earning

In 1952, to provide equilibrium between assets and liabilities of insurance companies, Frank Redington, an English actuary, proposed interest rate immunization te

Interest Rate Derivatives: India's first trading on interest rate derivatives began in the National Stock Exchange of India (NSE) in June 2003 with futures on 91-day treasury

Corporation - Form of doing business pursuant to a charter granted by a state or federal government. Corporations mainly are characterized by the issuance of freely transferable CA

Decentralization This is a company power structure in which authority and decision-making responsibility are diffused throughout various stages of an organization. Decentraliz

QUESTION (a) Briefly define foreign exchange rate risk and the three different types of exchange rate risks (b) Identify and outline the different methods of internal and ex