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
TC  Shipping Ltd has decided to purchase a machine to augment the company's installed capacity to meet the growing demand for its products. There are three machines under considera

Criticize the flexible exchange rate regime from the viewpoint of the proponents of the fixed exchange rate regime. If exchange rates are fluctuating very frequently, that may

Alternative summarised version of tests of controls · Segregation of duty (staff records are separate from wages department) · Documentation ( written evidence ) ·

As an investor, what factors would you consider before investing in the emerging stock market of a developing country? Answer:  An investor in emerging market stocks requirements

Q. Determine Earnings per share? Current earnings per share = 100 × (4550 - 225)/ 5000 = 86.5 cents Earnings per share after one year = 100 × (4508 - 225)/ 5000 = 85.7 cents

Volume of Issues of Central and State Government Securities The growth of government securities market in India and the investor response to the government bond issues can be k

Company capacity to continue trading Given the preceding discussion it is unlikely that the business can continue in its current form. The trading performance is clearly very

Define the term- Cash purchases     Shareholders of the target company are bought out completely and have no further stake in business. This is good if predator shareholders want

Public Bourses The origin of this type of bourses can be found in the legislative work of Napoleon. These type of bourses are regulated by the government, brokers are appointed

WHY ORDINARY SHARES DIFFER IN DIFFERENT COMPANIES