DIVIDENDS.... Are they even required? How are dividends decided?

DIVIDENDS....

Are they even required?

How are dividends decided?

And what policy should a company purse here in YOUR view, of declaring dividends or not, and if so how much..

Expert Solution

Dividends are part of profits which are paid back to the equity shareholders of the company and they are not mandatory in nature.

Dividend payments are not required to be paid and companies are generally not even paying them if they are able to record a higher amount of growth and they have better projects today in advance, then they will be utilising profits back into the growth of business rather than repayment as dividend.

Dividends are generally determined by certain percentages of the profit and they will be trying to assign a growth rate to with profit and dividend as well.

A company which does not have higher reinvestment options should be trying to repay their dividend to the shareholders and they will be determining a constant growth dividend if there is a growth in the profit which is associated with the company but if there are no growth than they can also adopt constant dividend and it will be helping in higher satisfaction for share holders

jeff jeffy answered 2 years ago

what are the different types of dividends and are they required?

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