What is a temporary dividend?

Temporary dividend is a partial payment of dividends, which is issued to shareholders at the discretion of the Board of Directors. This type of dividend is often extended after the interim or half of the year's audit of the company's accounting records. Directors usually evaluate business progress in the first half of the year and issue a somewhat conservative partial dividend based on their expectations, how the company will work for the rest of the business year. In most cases, the temporary dividend is less than the final dividend, which is issued after the completion and acceptance of the final accounting for the business year.

The issue of temporary dividends is common in many countries around the world. Shareholders with investments in the UK company often receive this type of partial dividend payments shortly after the second quarter of the business year and the financial accounting has accepted the place. In other countries, companies may or may not or may not provide dividend payments in the middle of the year, depending on government municipalitiesThe regulations that may relate to and the provisions found in the articles of the company concerning the issue of shares and dividends of shares.

In countries where temporary dividend is relatively common, directors usually evaluate the outcome of the company during the first half of the year using data collected during the year. This information is considered together with the planned corporation performance for the rest of the business year. At this point, the directors will determine what they consider to be a fair temporary dividend amount for distribution.

It is important to realize that the process of determining the amount of interim dividend is not only based on the latest performance. Society officers rarely assume that the performance level in the second half of the year will be equal to the level achieved in the first half. Directors will assume more often that the remaining two quarters of the year could generate niEducation yields and allow this option to calculate the amount of temporary dividend. This means that directors can conservatively extend the dividend in the middle of the year, which is thirty or forty percent of dividends, which is expected to be due after the financial year. This helps to isolate the company from potential decreases in income or other events that could negatively affect the return on the issued shares.