What are the different types of dividend policy theory?

Theory of dividend policies represents various methods in which the company rewards investors financially. Dividends are often immediate remuneration for investors, rather than waiting for a stock price for a while to gain financial revenues. Companies are often involved in one of the few different types of dividend policy theory, although the three are most excellent: cash dividends, dividends of shares and return of shares. There may also be other types of dividends, although they may be less common than they mention. In most cases, the company pays dividends quarterly, although the annual dividend payment is also common for some types of investment. This dividend policy theory simply states how much money the company pays for shareholders and stock class, such as preferred and common. The frequency of paycheck and the type of growth associated with monetary dividends are also part of this theory. Most companies are involved in cash dividends that remain the same for every quarter or year, with a slight intentionTEM over time. Other times, the company can initiate special one -off cash dividends through its dividend policy.

shares dividends usually work in the same way as cash dividends, although investors receive more stock than money. The frequency and number of shares that each investor receives is governed by a similar pattern to cash dividends. In some cases, however, share dividends may be less popular, as the issuance of new shares in large numbers can dilute the value of the current shares of the outstanding. While investors can enjoy the idea of ​​dividend shares, the total value of all shares held by investors may fall at a price or value. However, the advantage of dividend shares for the company is that the company retains cash from undivided earnings.

Back repurchases in the Terms Theory of Policy Theory Dividend does not actually mean that society gives in inVestors nothing. In fact, investigating shares from investors reduce stock offering. According to the basic economic principle of supply and demand, when the supply falls to the item, the price of the item increases. When investing in shares, the price increase leads to a higher value of shares for current shareholders, who can then sell shares in some cases for great profit. Moreover, a company that purchases shares is often considered to be a good investment, which increases demand and again increases the stock price according to this theory of dividend policy.