Definitions for dividend policy
div·i·dend pol·i·cy

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1. Dividend policy

   Dividend policy is concerned with financial policies regarding paying cash dividend in the present or paying an increased dividend at a later stage. Whether to issue dividends, and what amount, is determined mainly on the basis of the company's unappropriated profit (excess cash) and influenced by the company's long-term earning power. When cash surplus exists and is not needed by the firm, then management is expected to pay out some or all of those surplus earnings in the form of cash dividends or to repurchase the company's stock through a share buyback program. If there are no NPV positive opportunities, i.e. projects where returns exceed the hurdle rate, and excess cash surplus is not needed, then – finance theory suggests – management should return some or all of the excess cash to shareholders as dividends. This is the general case, however there are exceptions. For example, shareholders of a "growth stock", expect that the company will, almost by definition, retain most of the excess earnings so as to fund future growth internally. By with holding current dividend payments to shareholders, managers of growth companies are hoping that dividend payments will be increased proportionality higher in the future, to offset the retainment of current earnings and the internal financing of present investment projects. Management must also choose the form of the dividend distribution, generally as cash dividends or via a share buyback. Various factors may be taken into consideration: where shareholders must pay tax on dividends, firms may elect to retain earnings or to perform a stock buyback, in both cases increasing the value of shares outstanding. Alternatively, some companies will pay "dividends" from stock rather than in cash; see Corporate action. Financial theory suggests that the dividend policy should be set based upon the type of company and what management determines is the best use of those dividend resources for the firm to its shareholders. As a general rule, shareholders of growth companies would prefer managers to have a share buyback program, whereas shareholders of value or secondary stocks would prefer the management of these companies to payout surplus earnings in the form of cash dividends.

How to pronounce dividend policy?

1. Alex

   US English

   David

   US English

   Mark

   US English

   Daniel

   British

   Libby

   British

   Mia

   British

   Karen

   Australian

   Hayley

   Australian

   Natasha

   Australian

   Veena

   Indian

   Priya

   Indian

   Neerja

   Indian

   Zira

   US English

   Oliver

   British

   Wendy

   British

   Fred

   US English

   Tessa

   South African

How to say dividend policy in sign language?

Numerology

1. Chaldean Numerology

   The numerical value of dividend policy in Chaldean Numerology is: 8

2. Pythagorean Numerology

   The numerical value of dividend policy in Pythagorean Numerology is: 7

Examples of dividend policy in a Sentence

1. Edmund Shing:

   Before becoming positive on the sector, I would like to see them making efforts to improve productivity, adopt technologies like softwares to optimize logistics networks, cut labor costs and have a sustainable dividend policy, it's a very competitive market, growth prospects are limited and the barrier to entry is not very high. The danger for the market is that Amazon might replicate its experiment across Europe and other online companies such as eBay also launch their own delivery services to cut costs.

2. Ben Lyons:

   We've been bemused for some time at the lack of share price depreciation in light of the deteriorating earnings profile for the group and we've been skeptical for many months about the dividend policy of the company, it's interesting to see how things have played out reasonably rapidly. Brazil was certainly one of the major catalysts.

3. Rio Tinto:

   In light of the significant deterioration in the macro-economic environment and the resultant market uncertainty, the board believes that it is no longer appropriate to maintain the progressive dividend policy.

4. Edmund Shing:

   Before becoming positive on the sector, I would like to see them making efforts to improve productivity, adopt technologies like softwares to optimise logistics networks, cut labour costs and have a sustainable dividend policy, it's a very competitive market, growth prospects are limited and the barrier to entry is not very high. The danger for the market is that Amazon might replicate its experiment across Europe and other online companies such as eBay also launch their own delivery services to cut costs.

References

1. ^ Wikipedia
   https://en.wikipedia.org/wiki/Dividend_Policy