Cause and Effect Essay Outline: Types, Examples, Tips.
The company should, therefore, distribute a reasonable amount as dividends (which should include a normal rate of interest plus a return for the risks assumed) to its members and retain the rest for its growth and survival. Types of Dividend Policy: The various types of dividend policies are discussed as follows: (a) Regular Dividend Policy.Types of Dividend Definition: The Dividends are the proportion of revenues paid to the shareholders. The amount to be distributed among the shareholders depends on the earnings of the firm and is decided by the board of directors.The cash dividend is by far the most common of the dividend types used. On the date of declaration, the board of directors resolves to pay a certain dividend amount in cash to those investors holding the company's stock on a specific date. The date of record is the date on which dividends are assigned to the holders of the company's stock.
The profits are then divided into two dividends, a normal and an incremental dividend, to make notification to investors that this type of dividend is unexpected and would not continue in the future (Levy and Sarnat 1994). There are several alternatives for the profits dividend.Relevance and Irrelevance Theories of Dividend Dividend is that portion of net profits which is distributed among the shareholders. The dividend decision of the firm is of crucial importance for the finance manager since it determines the amount to be distributed among shareholders and the amount of profit to be retained in the business.
For the benefit of the business owner, I’ve listed the six types of business organizations with easy to compare pros and cons. Since small businesses change over time, it’s important to understand that what business organization you chose today will change with the business; “the tax laws and other regulations that influence the way we operate also are in constant flux” (Anthony, n.d.
