CORPORATE FINANCE

AVAILABILITY OF DIVIDEND
POLICY IN CORPORATE
ROHAN D NIKAM
MBA CORE 013096
FINANCE 2
DATE : 29.09.2014
MEANING OF DIVIDEND


The term dividend refers to that portion of
profit which is distributed among the
owners/shareholders of the firm.

INTRODUCTION TO DIVIDEND
POLICY

The dividend policy of a firm determines what
proportion of earnings is paid to
shareholders by way of dividends and what
proportion is to be retained back in the firm
for reinvestment purposes.
MEANING OF DIVIDEND POLICY

Dividend policy is concerned with financial
policies regarding payment of 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 profit .

FACTORS AFFECTING DIVIDEND
POLICY
A firm's dividend policy is influenced by the large numbers
of factors.
Some factors affect the amount of dividend and some
factors affect types of dividend.
The following are the some major factors which influence
the dividend policy of the firm.
1. Firm's liquidity position
2. Expected rate of return
3. Stability of earning
4. Access to the capital market

TYPES OF DIVIDEND POLICY


1. Regular dividend policy
2. Stable dividend policy
3. Irregular dividend
4. No dividend
ADVANTAGES OF DIVIDEND POLICY
The payment of dividends to the
shareholders is ensured irrespective of the
earnings of the company.

It is beneficial to those investors who expect
regular income on their investments to meet
their expenses.
DISADVANTAGES OF DIVIDEND
POLICY
Adverse effects on financial stability of the
firm cannot be considered easily by
changing the stable dividend policy.

If the company fails to pay dividend
constantly in any year that shows the
weakness of the company in maintaining
stability.

THANK YOU.