Monday, June 24, 2013

What is Divident and Dividend Policy?

Dividend
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Dividend is refers the distribution of value to shareholders.
“Dividend is a payment (Disbursement) that made out of a firm’s earning to its owners, in the form of either stock or case.”                               
                                                                             --------According to Ross, Westerfield & Jordan.

Dividend policy

What Does Dividend Policy Mean?

A company's stance on whether it will pay out profits as dividends or keep them as the retained earnings. If company decides to issue (concern) dividends, the policy will draw round whether or not the dividends will be issued on an ongoing basis, or if the dividend payout



  • The policy that a company uses to settle on how much it will pay out to shareholders in dividends.
  • What happens to the value of firm as dividend is increased, holding everything else (borrowing, capital budgets,) constant. Thus, it is trade-off between retained earnings on one hand, and distributing the cash or securities on other.

   “Dividend policy that involves with the decision to pay out earning’s or to retain them for reinvestment in the firm.”                                                          
                                                                                                  --------------- According to KHAN & JAIN.

   “The firm’s dividend policy that represents a plan to exploit to be followed whenever the dividend is made (completed).”                               
                                                                                                   ----------------According to L.J. gitman.


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