What is a Dividend
A dividend is the distribution of a company’s earnings to its shareholders.
What is a Dividend Policy
A dividend policy is the policy a company uses to structure its dividend payout to shareholders. The dividend policy dictates the amount of dividends paid out by the company to its shareholders and the frequency with which the dividends are paid out.
When a company makes a profit, they need to make a decision on what to do with it. They can either retain the profits in the company or they can distribute the money to shareholders in the form of dividends.
Types of Dividend Policies
- Stable Dividend Policy
- Constant Dividend Policy
- Residual Dividend Policy
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