Assignment on Dividend Policy Decision - Assignment Point
Assignment on Dividend Policy Decision
Subject: Management | Topics:

Dividend Policy Decision:

Dividend:

Dividend refers to that portion of a firm’s earnings which are paid out to the shareholders.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.

•Net Income – alternative
1)100% net income can be declared as dividend
2)100% net income can be lets as retained earnings
3)Some part of net income can be declared as dividend and some let as retained earnings.

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Dividend Policy

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