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.