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 ?
According to the existing literature these factors are considered to be positively related to dividend policies and hence the expected sign of this factor become negative.
Various tax burdens for dividends and capital yields create different groups of investors interested in various corporate dividend policies.
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.