GENERAL KNOWLEDGE

Detailed explanation-1: -DEFINITION: DIVIDEND POLICY It is the decision about how much of earnings to pay out as dividends versus retaining and reinvesting earnings in the firm. Dividend policy must be evaluated in light of the objective of the firm namely, to choose a policy that will maximize the value of the firm to its shareholders.

Detailed explanation-2: -There are several different factors that may determine the dividend policy type favored by a business, including debt obligations, earnings stability, shareholder expectations, the company’s financial policy, and the impact of the trade cycle.

Detailed explanation-3: -In cash dividends, the company pays a fixed amount per share to its shareholders. For example, if the dividend rate is 5% and you have 100 shares of the company, your cash dividend value would be 5 x ₹100 = ₹500. Cash dividends are more popular than other forms of dividends in India.

Detailed explanation-4: -A corporation’s dividend policy is decided by its board of directors. The decision as to whether dividends should be paid out on common stock, and the amount of any such dividends, depends on a variety of factors.