A policy of paying a low regular dividend plus a year-end extra in good years is a compromise between a stable dividend and a constant payout rate.This policy gives the firm flexibility.
Dividend
Dividends are payments made by a corporation to its shareholder members. When a corporation earns a profit or surplus, that money can be put to two uses: it can either be re-invested in the business (called retained earnings), or it can be paid to the shareholders as a dividend. Many corporations retain a portion of their earnings and pay the remainder as a dividend. For a joint stock company, a dividend is allocated as a fixed amount per share. Therefore, a shareholder receives a dividend in proportion to their shareholding. For the joint stock company, paying dividends is not an expense; rather, it is the division of an asset among shareholders. Public companies usually pay dividends on a fixed schedule, but may declare a dividend at any time, sometimes called a special dividend to distinguish it from a regular one. Dividends are usually settled on a cash basis, as a payment from the company to the shareholder. They can take other forms, such as store credits (common among retail consumers' cooperatives) and shares in the company (either newly-created shares or existing shares bought in the market.) Further, many public companies offer dividend reinvestment plans, which automatically use the cash dividend to purchase additional shares for the shareholder.
Generally, the price of a stock will rise around the same amount as the announced dividend. This may happen within a trading day or over a few days, because buyers are guaranteed a known return on their investment (the dividend). There is an element of risk involved in buying a share simply because it is about to go ex-dividend. A share's price will usually drop by the amount of the dividend very quickly after the ex-dividend date because new buyers won't be eligible for the dividend. Therefore, you could be holding a share that is worth less than what you paid for it and you will have to hold onto it for a while. But if the company's financials are solid, it is not unusual for the price to actually continue to rise. It depends a great deal on where the dividends are coming from, genuine profit or borrowings.
it can't be distributed as dividend
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THe answer is dividend. THe answer is dividend.
If dividend income received: Debit Cash / bank Credit Dividend income If dividend income receivable: Debit Dividend income receivable Credit Dividend income
Dividend receivable Debit Cash dividend Credit Cash Debit Dividend receivable Credit
A dividend is a no. which is divided
Dividend Disbursement
Divisor: the number by which a dividend is divided Dividend: a number to be divided
A declared cash dividend is recorded by debiting the dividend account and crediting the dividend payable account.
Relative Dividend Yield is dividend yield of a stock compared the dividend yield of the S&P 500
[Debit] Proposed dividend [Credit] Dividend payable
Dividend factor = Net earned income / dividend earning shares
Interim Dividend: Companies can pay dividend at the end of financial year which is called final dividend but sometimes companies declare two dividends one in the middle of the financial years that dividend is called interim dividend and then one at the end of the financial year which is called final dividend.