Dividend Policy

Need help with your homework? Look no further! Our subject experts are ready to effortlessly handle your assignments, so you can finally say goodbye to stress and hello to top grades.

Click or drag files to this area to upload. You can upload up to 3 files.
Get a response in under 15 min

Dividend policy is a set of procedure where a financial manager of the company along with other Board of Directors decides about the amount of profit to be distributed among shareholders in the form of dividends. This policy forms to be an important part of the corporate strategy of an organization.

In simple terms, it is the share of profitable earnings which is distributed among a company’s shareholders.

Defining Dividend Policy

Weston and Brighan have defined Dividend Policy as a determination of the division of earnings between retained earnings and payments made to shareholders.

It is a dividable profit which is spread among the members belonging to an organization as per the proportion to their shares in a way.  This proportion is prescribed in that company’s Memorandum and Articles of Association. It is only the Board of Directors who has the authority to recommend and declare these dividends.

Factors influencing an organization’s Dividend Policy

Factors which affect the dividend policy to be framed by an organization are as follows-

  1. Organization’s age

An important factor which affects dividend policy of an organization is its age. In case it is a newly established company, the company may keep a strict dividend policy as it needs to keep a large share of the incurred profits for its own growth and development. However, in case it is an old company which has already made a name for itself, it will frame a consistent dividend policy.

  1. Overall economic condition of a company

Even the general economic condition of a company will have a large effect on the company’s dividend policy.

For instance, if a company is under a huge financial crisis, it will keep a huge part of its income for its own reserve to maintain a stable liquidity. In case a company enjoys a prosperous scenario, it will be liberal while framing the dividend policy.

  1. Tax policy

The government’s taxation policy has an immense effect on the dividend policy of a company. At a time when the government provides tax incentives, shareholders get more dividends.

  1. Policy of the respective Government

Other than this taxation policy, there are several other policies of the government which has its effect on the dividend distribution of a company. There are times when government puts limitations on the percentage of dividend distribution.

It is on such policies that a company frames its dividend policy.

  1. Position of Capital Market

If the Board of Directors feel that the state of capital market is positive towards the company, it will raise funds from various sources to declare a high rate of dividend policy in that financial year.

  1. Rate of Dividend in previous year

While framing the dividend policy of this current year, the Board of Directors refers to the rate of dividend which was declared in the previous year. Generally the rate of dividend is on an average of the earlier rate.

  1. Borrowing ability

Large scale organizations which have made a name for themselves enjoy better accessibility to the capital market than those small or newly established companies. This accessibility gives them the ability to borrow funds from external sources when and where required. In such cases, they tend to offer high rate of dividends.

However, in case of small scale companies, the rate of dividend offered may be low as they need to maintain sufficient reserves.

  1. Liquidity of funds

At times when a company enjoys sufficient availability of cash, the rates of dividend offered tend to be on a higher side. Better the cash outflow, better is the payment of dividend of that company.

  1. Regularity and Stability of Dividend Payment

Dividends are needed to be paid to the investors on a regular basis as all investors expect regular dividend payments. This is a process how companies retain their existing shareholders.

Types of Dividend Policy

Dividend policies can be classified into the following types-

  1. Stable Dividend Policy

When a company maintains more or less stability in their rate of dividend, it is known as a stable dividend policy. Only when the market price of a share is on a higher side permanently, can the organization adopt and maintain a stable dividend policy.

  1. No Immediate Dividend Policy

It is a dividend distribution policy where an organization decides that it will not pay dividends even after incurring huge profits. This may be only if it is a newly established company, preparing for growth and development or if its accessibility to the capital market is very difficult.

  1. Regular Stock Dividend Policy

Such a policy is adopted by an organization only when it decides to pay dividends through shares instead of cash dividends. Once the stock dividends are declared by the Board of Directors of a company, it has no effect on the liquidity of that firm. Stock dividends increase the shareholdings that a company’s shareholders have.

  1. Irregular Dividend Policy

Organizations having irregular earnings adopt the irregular dividends policy. Such companies are liable to pay dividends only when they earn huge profits.


Links of Previous Main Topic:-

Links of Next Finance Topics:-

Homework Blues?

Get expert help with homework for all subjects.

  • NPlagiarism-free work
  • NHonest Pricing
  • NMoney-back guarantee

Latest Reviews

Solved Sample Works

Accounting Homework

Corporate Accounting Sample

Biology Homework

Genetics Assignment Sample

Essay Writing Help

Business Plan Sample

Homework Help FAQs

Our Answers to Your Questions

How do I submit my homework?

Getting homework help is very simple with us. Students can either send us the homework via email or they can upload it to our online form here. For a quicker response, You can also chat with us at WhatsApp and submit homework directly. You are sure to get a response from our side within 10 minutes.

How much will my homework cost?

The cost of paying someone to do your homework varies depending on the service and the type of assignment. We have listed our standard pricing plans for popularly used writing services. For other kind of assignments, You can get a free instant quote from us using our online form.

We also accept partial payment to start working on your assignment help. You can pay the remaining amount when your task gets completed. No pressure of up-front payment. No hidden order costs.

Can I receive help with my homework anytime?

Yes, you can receive help with your homework anytime with us. Our online homework help services are available 24/7, allowing you to receive assistance with your homework anytime, anywhere.

For urgent homework requests, reach out to us through our LiveChat or WhatsApp channels and one of our friendly support agents will assist you in finding the right expert for your online homework help request immediately. With our services, you can rely on 24/7 availability and meeting deadlines.

Are online homework websites budget-friendly for students like me?

Yes, Our Online Homework Help websites are an affordable solution for you as a student. Compared to traditional tutoring services, MyHomeworkHelp prices their homework help services honestly and within the budget of college students. This makes it easier for you to receive assistance with your homework without breaking the bank.

What is your plagiarism-free policy?

At myhomeworkhelp, we take plagiarism very seriously and ensure that all solutions provided by our tutors are original and authentic. Our tutors are trained to provide custom-made solutions, tailored specifically to meet the requirements of each student. We do not provide pre-written papers. All our homeswork solutions are made from scratch, guaranteeing 100% orignal homework answers.

Additionally, we have strict plagiarism-detection tools in place to check all submissions for authenticity.

Is using an Online Homework Help Service cheating?

Using online homework help services is not equivalent to cheating. Our services are intended to support students with their homework and provide them with the resources they need to succeed academically. With the help of our online homework help services, students can receive immediate assistance with their homework from any location, at any time.

At myhomeworkhelp, we are committed to promoting academic integrity. Our tutors provide solutions that serve as guides for drafting your own work. It is not acceptable to submit someone else's work as your own, as this constitutes academic plagiarism.

Can I chat with my tutor?

Using our secure chat board, you can now chat directly with your assigned tutor. The chats are encrypted both ways to secure your privacy. This makes your contact with the tutor directly & confidentially, so you can better explain any requirements or changes if needed or just need updates.

You can't contact the experts outside of chat board platform. Sharing any personal information, including but not limited to contact information, goes against our Terms and Conditions and therefore may result in permanently blocking you from the platform. We take any personal data very seriously and we do it for the safety of our users.

Know more about chat board here.

What is your money-back guarantee policy?

It’s worth noting that our online homework help service rarely leads to disappointment among students. Our expert tutors, along with our support and quality assurance team, are dedicated to providing the best possible experience for our customers. However, if for any reason a student is unsatisfied with their homework help solution, we offer unlimited revisions until they are fully satisfied.

In the rare event that a student remains unsatisfied even after revisions, we offer a money-back guarantee. We want all of our students to feel confident and secure when they turn to us for assistance with their homework, and this guarantee is just one way that we demonstrate our commitment to providing the best possible service. If you have any concerns about our services or the quality of the work you receive, please contact us for support.

What is the expertise of the tutor assigned to do my homework?

At myhomeworkhelp, we take pride in our team of qualified and experienced tutors. All of our tutors undergo a rigorous selection process and are required to have a minimum of a master's degree in their respective fields. Additionally, they must pass a series of tests to demonstrate their proficiency and ability to deliver quality work. We believe in transparency and providing our clients with the best possible service. You can be confident in the expertise of the tutor assigned to do your homework.

What about privacy & confidentiality?

Using My Homework Help is absolutely safe. We care about your security, therefore we encrypt all personal data to make every user feel safe while using our services and we don’t share any personal information with any third parties without your permission. Your credit card information is not stored anywhere at My Homework Help, and use of PayPal relies on their secure payment networks. Your identity, payment and homework are in safe hands. You can always be certain of getting professional help and remaining anonymous, while using My Homework Help.