Dividend policy

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Dividend policy

Standards by which a firm determines the amount of money it will pay as dividends.

Dividend Policy

The amount of a dividend that a publicly-traded company decides to pay out to shareholders. The dividend policy may change from time to time. Factors affecting a dividend policy include the company's earnings for the relevant period and its expected performance in the near future. Many companies, especially startups, have a rather stingy dividend policy because they plow back much of their earnings into further development. Established companies, such as blue chips, tend to have relatively liberal dividend policies. However, some research, notably Miller and Modigliani's irrelevance proposition, suggests that a company's dividend policy does not impact its performance in any way. See also: Dividend clientele, Signaling approach (on dividend policy).
References in periodicals archive ?
The relationship between the ownership structure and liability policies and profit dividend Policies by Jensen and et al (1992) [7] studied.
There are several reasons for improvements in dividend payments (higher earnings, better dividend policies, improved corporate governance).
In the United States, previous financial literature has provided some empirical evidence regarding the factors affecting firmsa€™ dividend policies, which includes asymmetric information.
Based on the time period 1985-1999, it is concluded that Jordanian companies follow stable cash dividend policies.
All dividend policies are equivalent; management cannot create wealth by slicing and dicing the firm's earnings.
CIGNA also made promises of long-term commitment to its retention dividend policies and insureds.
The Boards (Boards of Directors) of Enersis (NYSE:ENI), the flagship company for ENDESA's Latin American businesses, and Endesa Chile (NYSE:EOC), the 60%-owned subsidiary of the Chilean holding company, have agreed to modify their respective dividend policies.
In making the decision, the Board considered Modine's recent forecast, on-going capital needs, and the dividend policies of comparable companies.
In making that decision, the Board will consider each company's financial performance and on-going capital needs, the dividend policies and capital structures of comparable companies, and other factors deemed relevant.
Dividend policies and share repurchase plans are subject to approval by each company's Board.
Post-separation dividend policies for both NewCo and Citizens Utilities will continue to be evaluated and will be subject to approval by each company's board of directors.