Bank - Tips and Advice: Dividendsby aprilcheaw
FeedTheVillage.com - Tips and Advice: Dividends
Dividends are the cash payments that corporations make their common stockholders. Dividends provide the return common stockholders receive from the firm for the equity they have supplied. Even companies that do not currently pay dividends reinvest in the firm the earning they generate. In this way they increase the ability of the firm to pay dividends in the future. The board of directors decides what dividend policy best serves the common stockholders of the firm. Should a dividend be paid now, or should the earnings generated be reinvested for the future benefits of the common stockholders? If dividends are paid now, how much should be paid? Although only corporations officially pay dividends to owners, sole proprietorships and partnerships also distribute profits to owners. Many of the same considerations examined in this for corporate dividend policy can also be used to help make proper profit distribution decisions for these other forms of business organization.
|
