What is Dividend
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#WhatisDividend Hello, everyone, this presentation concept is a dividend in the share market,many people asking me what is a dividend and what is dividend investing and how to choose dividend stocks.The dividend shares money and this money share with shareholder dividend are very important for investment point of view and dividend is a very good source for judge good stocks in share market and in this market. I hope this video helps you good luck. This presentation covers the basics of Dividend, Ex-Dividend, Record Date, Ex-Date. Dividends are when a company distributes a portion of its profits to its shareholders.
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Plan 1 ( Only Equity Shares )
EPS = (EBIT (1−Tax rate))/(No. of Outstanding Shares)
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EPS = ((EBIT −Interest) (1−Tax rate))/(No. of Outstanding Shares)
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Plan 4 (Equity shares & Preference Shares)
EPS = (EBIT (1−Tax rate)−Pref. Dividend)/(No. of Outstanding Shares)
Thank You For Waching
Subscribe to DevTech Finance
Dividend policy ppt
The document discusses dividend policy and provides details about:
1. The meaning of dividend and dividend policy, and factors that affect dividend policy such as ownership considerations, nature of business, and investment opportunities.
2. Different types of dividends including cash dividend, stock dividend, property dividend, and debenture dividend.
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Notes of dividend and interest
Companies earn revenue from sales and other operations which is used to pay expenses, interest on borrowed capital, and taxes. Any remaining amount is profit which can be used to pay dividends to shareholders or retain in reserves. Dividends are distributions of a company's profits to shareholders that are recommended by the board of directors and approved by shareholders. They are considered a reward or return on the shareholders' investment in the company and are paid out of current year profits or retained earnings.
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Dividend Decisions.pdf
The dividend policies of an organization have a significant bearing on the market value of stocks. Companies must distribute dividends in line with the industry standards and previously distributed dividends by the company. The shareholders will otherwise perceive this variability negatively. It casts suspicion on the financial health and motives of the management (signaling effect). In aggregate, an inefficient dividend decision mechanism would adversely impact the valuation of the company.
Table of Contents
What are Dividend Decisions?
Impact of Dividend Decisions on Price
Factors affecting Dividend Decisions
Cash Requirement
Evaluation of Price Sensitivity
Stage of Growth
Good Dividend Policy
Importance of Dividend Decisions
Q. How much Dividend should a Company Distribute to its Shareholders?
Q. What will be the Impact of Dividend Decisions on the Share Prices of the Company?
Q. What is the Consequential Impact of Inability to Maintain Dividend Year after Year?
Types of Dividend Decision
Stable Dividends
Constant Dividends
Alternate Dividend Decisions
Factors affecting Dividend Decisions
Cash Requirement
The financial manager must take into account the capital fund requirements while framing a dividend policy. Generous distribution of dividends in capital-intensive periods may put the company in financial distress.
Evaluation of Price Sensitivity
Companies chosen by investors for their regularity of dividends must have a more stringent dividend policy than others. It becomes essential for such companies to take effective dividend decisions for maintaining stock prices.
Stage of Growth
Dividend decisions must be in line with the stage of the company- infancy, growth, maturity & decline. Each stage undergoes different conditions and therefore calls for different dividend decisions.
Good Dividend Policy
What Constitutes a Good Dividend Policy?
There does not exist a single dividend decision process that works for every organization. A decision suitable for one company may prove fatal for another company. For example, businesses with a consistent order book such as telecom and banking are expected to pay regular dividends. It may impact the stock prices if they do not pay dividends regularly. On the contrary, sectors of pharmaceutical and technology are highly research-oriented. These require huge cash expenses to further their operations. Therefore they cannot afford to pay a regular dividend. Investors of such stocks earn income mainly through capital appreciation. In essence, there are a lot of factors affecting dividend policy or decisions.
We can refer to the following renowned theories on Dividend Policy:
Modigliani- Miller Theory on Dividend Policy
Gordon’s Theory on Dividend Policy
Walter’s Theory on Dividend Policy
A good financial manager must, therefore, answer the following questions before taking crucial dividend decisions
Importance of Dividend Decisions
While deciding the distribution of dividends, management has to answe
Process for Declaration & Payment of Dividend
“Dividend” means a distribution of any sums to Members by the Company out of profits and wherever permitted out of free reserves available with the Company.
Dividend is basically a return on investment made by an investor in any Company. Generally when business of any company is thriving, Company either resorts to reinvest the profits into the business or distribute a part of their earning among the shareholders as dividend on shares.
Based on the profit or retained earnings, management of the Company may decide for quantum of the dividend to be paid.
What is Dividend.pdf
A dividend is a payment made by a company to its shareholders from earnings. Management can choose to reinvest profits to grow the business or pay dividends. Dividends are most commonly paid as cash deposits in shareholders' accounts. Companies often pay dividends quarterly but some pay semi-annually or annually, and they are not obligated to pay dividends. To receive a dividend, investors must purchase shares before the ex-dividend date, which is typically a couple days before the record date. Dividend yield measures the percentage return from dividends and allows comparison between dividend stocks and bonds.
dividends.docx
Dividends are payments made by a corporation to its shareholders, usually from current or past profits. There are different types of dividends including cash dividends, stock dividends, and special dividends. Companies establish dividend policies that determine how much of profits to pay out as dividends versus retaining for reinvestment. Common dividend policies include stable dividend policies that aim to maintain consistent dividend payouts over time.
What are Dividends? UK Limited Company Dividends
Limited company dividends refer to the distribution of profits that a company makes to its shareholders. In the United Kingdom, a limited company is a business structure that has its finances separate from the personal finances of its owners (shareholders). When a limited company generates profits, the directors may choose to distribute a portion of these profits to shareholders in the form of dividends.
CONCEPT OF DIVIDEND.pptx
The document discusses dividends and dividend policy. It defines a dividend as a share of profits and retained earnings that a company pays out to its shareholders. Dividends can be paid out in cash, stock, or assets. A company's dividend policy outlines how much it will pay out to shareholders, as well as the timing and type of dividend. While dividends provide stable income to investors, they also decrease a company's retained earnings and limit its growth potential by reducing usable cash.
Divedend
This document discusses dividend policy and the factors that affect it. It defines dividends as payments made by corporations to shareholders from profits. There are different types of dividends including cash dividends, stock dividends, scrip dividends, property dividends, and bond dividends. Factors that influence a company's dividend policy include the state of the economy, legal restrictions, tax policy, shareholders' desires, the company's financial needs and stability of earnings, management's control desires, and liquidity position.
Corporate Dividend policy
This document provides an overview of corporate dividend policy. It discusses what dividends are, different types of dividends, factors that influence dividend policy decisions, and common dividend measurement approaches. Key points covered include that dividends are payments made to shareholders from corporate profits, factors like liquidity, growth opportunities, and legal requirements influence dividend policies, and policies generally aim for stable and regular dividend payouts.
dividend decision.
This document discusses dividend decisions and various dividend theories. It begins by defining dividends and explaining their significance for shareholders and companies. It then discusses different dividend theories, including Walter's model, Gordon's model, and the Modigliani-Miller irrelevance theory. Walter's model proposes that the optimal dividend payout depends on a company's growth rate and cost of capital. Gordon's model expresses stock price as a function of dividends, retention rate, and growth rate. The Modigliani-Miller theory argues that dividend policy does not affect firm value under certain assumptions. The document also provides a summary of Reliance Industries' dividend announcements and payments over five years.
Corporations
Corporations have several key characteristics including separate legal entity status, limited liability for shareholders, transferable ownership through share trading, and continuous life regardless of ownership changes. A corporation is formed through registration and establishes a board of directors elected by shareholders to oversee policy and delegate daily operations. Financial statements include an income statement, statement of retained earnings, and balance sheet that account for transactions involving shares, earnings, dividends and retained earnings.
Dividends
1. A dividend is a distribution of a company's earnings to shareholders that is decided by the board of directors and indicates a company's positive future and strong performance.
2. There are several types of dividends including cash dividends, which are the most common and paid in cash; bonus shares which are additional shares given to shareholders; and share repurchases where a company buys back its own shares.
3. Several theories provide frameworks for determining optimal dividend policies including Walter's model which shows the relationship between a firm's internal rate of return and cost of capital, Gordon's model which relates market value to dividends, and Modigliani and Miller's hypothesis that dividend policy does not impact share
DIVIDEND PAYOUT RATIO
The dividend payout ratio measures the percentage of a company's net earnings that are paid out in dividends. It is calculated by dividing the total dividend amount by the net income. A lower payout ratio indicates that more earnings are being retained for reinvestment, while a higher ratio means more earnings are being distributed to shareholders. The payout ratio is important for investors to consider because it provides information about how much cash a company is willing to pay out versus reinvesting for future growth.
Dividend issues
This document discusses dividend policy and share repurchases. It notes that dividends distribute value to shareholders, and outlines important dates related to dividend declarations including the declaration date, record date, ex-dividend date, and payment date. It also discusses the tax advantages of share repurchases over dividends and some reasons why firms may opt to repurchase shares rather than pay dividends, such as signaling undervaluation or improving financial flexibility.
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What is Dividend
- 2. What is dividend? Dividend refers to the amount distributed by company to their shareholders as profit. Dividend may or may not given by the firm, it will be decided by management of that firm.
- 3. types of Dividend Cash Dividend: is the payment of actual cash from the company directly to the shareholders Stock Dividend: are paid out to shareholders by issuing new shares in the company. Property Dividend: is a dividend paid to investors with assets other than cash. Scrip Dividend: receiving of a cash dividend or the equivalent in additional shares of the company.
- 4. 4 types of dividend policies Regular Dividend Policy: pay out a dividend to its shareholders every year. Stable Dividend Policy: pay out a defined fixed percentage of profits as dividends every year. Irregular Dividend Policy: May or may not pay dividend No Dividend Policy: paying no dividend to the shareholders irrespective of its profit or loss
- 5. Key Dates Date of Declaration: is the date at which the board of directors announces and approves the payment of dividend. The declaration date includes the size of the dividend being issued and outlines the record date and payment date. Date of Execution: is the day you actually initiate the stock transaction Closing Date (Settlement date): is the date on which the Stock trade is finalized Ex-Dividend Date: is the first day that a stock trades without a dividend. Date of Record: is the date at which the investor must be on the company’s books in order to receive a dividend. Payment Date: is the date at which the dividend is paid to shareholders. Dividend payments may be either mailed or electronically transferred to the accounts of shareholders.
- 6. dividend coverage Dividend Coverage is the payout ratio. Payout ratio greater than 100 means company is paying out then they earned Payout Ratio = (Dividend per Share/Earning per Share)*100
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