Dividend Policys of Companies

Dividend Policys of Companies Essay example
Undergraduate
Essay
Finance & Accounting
Pages 5 (1255 words)
Download 0
Customer Name Instructor Course Name Date of Submission Dividend Policy Dividend policy is a type of strategy followed by publicly-traded companies in order to plan out the outflow of dividends to shareholders. This policy comprises of the deportment on whether a company would payout profits as dividends or just retain them as retained earnings…

Introduction

Companies which are in stages of growth or in initial stages normally have a sparing dividend policy because they reinvest or plow back much of their earnings into the company to experience growth and development (Financial Dictionary 2011). Established companies such as blue chips, Unilever and Wal-Mart being some of them, are inclined to relatively liberal dividend payout policies and grant dividends regularly on quarterly or half-yearly basis. For instance, Unilever (bearing a symbol of UL and listed on NYSE) pays a regular dividend every quarter; the most recent payout has been an amount of US$ 0.307 on November 8, 2011. Similarly, Wal-Mart paid a quarterly dividend of US$ 0.365 recently on December 07, 2011; a payment every quarter is being followed by the company. Dividends payment do assure shareholder satisfaction but some research, particularly Modigliani and Miller (MM)’s proposition on irrelevance depicts that a company’s performance and profitability is not affected by its dividend policy. Talking from the shareholder perspective, shareholders are more satisfied when they receive regular flows of dividends, even in small amounts but the factor of regularity ensures their confidence in the company. ...
Download paper
Not exactly what you need?

Related papers

Role of dividend signalling in corporate finance
as a major role in corporate finance. The study also provides a detailed research on the impact of dividend announcement on shareholder. Dividend is an important parameter to evaluate investment decision by the investors. So, there is a substantial role of dividend signalling on corporate finance as companies share value of organization through dividend payment.Thus, annual dividend announcement…
The Effect of Recession on Dividend Policy.
Some of the logical explanations on how the various sectors were affected by the recession in terms dividend payout. …
Companies Research
Total Asset Turnover has been on the high for Kroger and Wall-Mart with 3.487 and 2.335 respectively. Eaton has failed to maintain a high ratio; its turnover ratio stands at 0.795. Eaton Corporation has struggled in this regard as well, which is evident by its last position in the industry with respect to earnings produced with each dollar spent on an asset. Total Debt to equity ratio has been…
For and Against the Irrelevance of Dividend Policy
When earnings are dispensed as dividends, the company is deprived of funds which are needed for augmentation and development, and this might result in the company looking for supplementary capital from external sources. Firms are not legally required to pay dividends to stockholders. Similarly, the stockholders cannot officially compel the Board of Directors to declare dividends. In addition to…
DIVIDEND POLICY
The management increased both the interim and final dividend throughout the four-year period. In 2007 the company paid an interim dividend of 6.5p which increased to 6.75p in 2008, 6.9p in 2009,7.6p in 2010 and finally 7.9p in 2011. For the case of the final dividend, the amount paid in 2008 was 13.5p, which was increased to 14.1p, 16.2p, 16.85p in 2009,200 and 2011 respectively (Associated…
Dividend Policy Corporate Finance Essay
Dividend policy are a very important and crucial decision for any firm and needs to be taken in a planned manner so as to have a positive impact on all stake holders. The dividend policy needs to be clearly defined and may change every year depending upon the dynamic nature of the business. The firm can choose to retain all the earnings or pay them out as dividends or even strike a balance in the…
Corporate Valuation, Capital Structure and Dividend policy.
News Corporation is one of the top television groups in the world. Its business includes the best broadcasting company of United States called Fox Broadcasting Company. News Corporation’s cable network programming segment produces and issues licenses for programming to be broadcast on satellite. In addition to this News Corporation is one of the best motion picture producers. Fox Filmed…