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Retained earnings

Earnings not distributed to owner as dividends;a form of internal financeing.

Date of record

Set by a firm directors, the date on which all persons whose names are recorded as stockholders receive
a declared dividend at a specified future time.

Ex dividend

Period, beginning the date of record, during which a stock is sold without the right to receive the
current dividend.

Payment date

Set by the firm,s directors, the actual date on which the firm mails the dividend payment to the holders
of record.

Dividend payment time line

Time line for the announcement and payment of cash dividend for harish compay.

Dividend reinvestment plans

Plans that enable stockholders to use dividends receive on the firm,s stock to acquire additional shares
even fractional shares at little or no transaction cost.

Residual theory of dividends

A school of thought that suggest that the dividend paid by a firm should be viewed as a residuel that
amount left over after all acceptable investment opportunities have been undertaken.

Dividend irrelevance theory

Miller and modiglianis theory that in a perfect world, the firms value in determined solely by the
earning power and risk of it assets and that the manner in which it splits its earning stream between
dividends and internally retained funds does not affect his value.

Informational contents

The information provided by the dividends of a firm with respect to future earnings, which causes
owner to bid up and down the price of firm stock.

Cllentele effect

The argument that a firm attracts shareholders whose preferences for the payment and stability of
dividends.
Dividend relevance theory

The theory advanced by Gordon and lintner, that there is a direct relationship between the firms
dividends as less risky then future dividends or capital gains.

Dividend policy

The firms plan of actions to be followed whenever a dividend decision is made.

Dividend payout ratio

Indicate the percentages of each rupee earned that is distributed to the owner in the form of cash. It is
culated by the dividing firms cash dividend per share by its earning per share.

Constant-payout-ratio dividend policy

A dividend policy based on thee payment of a certain percentage of earnings to owner in each dividend
period.

Regular dividend policy

A policy based on the payment of a fixed rupee divided in each period.

Target dividend payment ratio

A dividend policy under which the firm attempts to payout a certain percentage of earning as a stated
rupee dividend toward a target payout as proven earning are higher then normal is a given period.

Extra dividend

An additional dividend optionally paid by the firm if earning are higher then normal is a given period.

Stock dividend

The payment, to existing owners of a dividend in the form of stock.

Small stock dividend

A stock dividend representing less then 20 to 25 percent of the common stock outstanding when the
dividend is declared.

Stock split

A method commonly used to lower the market price of a firms stock by increasing the number of shares
belonging to each shareholder.

Reserve stock split


A method used toraise the matket price of a firms stock by exchanging a certain number of outstanding
shares for one new share.

Stock repurchase

The repurchase by the firm of outstanding commo stock in the market place; desired effect of stock
repurchase are that they either enhance shareholder value or help to discourage an unfriendly takeover.

Tender offer

A formal offer to purchase a given number of shares of a firms stock at a specified price.