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Presented By:-

Surjesh (MBA/40051/18)
Manisha (MBA/40052/18)
Chandan (MBA/40053/18)
Vaibhav (MBA/40054/18)
Prince (MBA/40055/18
CONTENTS
What is Dividend?
Types Of Dividends
Dividend Policy
Types Of Dividends Policy
Dividend Strategy
WHAT IS DIVIDEND?
• The word dividend
comes from the Latin
word ”dividendum” which
means what is to be
divided
• Dividend is something that
a company pays to its
shareholders from its profit
or reserve
• May or may not be in Cash
Types Of Dividends

Cash dividend Stock dividend Property dividend

Scrip dividend Liquidating dividend


CASH DIVIDEND

Cash dividend refers to


paying a certain amount in
cash to those investors
holding the company stock
on a specific date.
STOCK DIVIDEND

A Stock Dividend Is
The Issuance Of Its
Common Stock By A
Company To Its Common
Shareholders Without Any
Consideration.
PROPERTY DIVIDEND

A Company Can Issue


Non- Monetary Dividend
To Investors Rather Than
Making A Cash Or Stock
Payment.
SCRIP DIVIDEND

A Company May Not


Have Sufficient Fund To
Issue Dividend, so It Issue
A Promissory Note To Pay
Shareholders Later Date.
LIQUIDATING DIVIDEND

When board of
directors wishes to return
the capital originally
contributed by
shareholders as dividend.
DIVIDEND POLICY

Dividend policy is the set of guidelines a company uses to


decide how much of the company’s earning to be paid out to
shareholders.
Types Of Dividend Policy

Regular Dividend Policy Irregular Divided Policy

Stable Dividend Policy No Dividends


REGULAR DIVIDEND POLICY
• Investors get Dividend at
Usual Rate.
• Investors are generally
Retired Persons or weaker
sections Of the society who
want To Get Regular
Income.
• Can be maintained only if
the company has Regular
Earnings.
IRREGULAR DIVIDEND POLICY
Adopted under
following situations:
• Due to uncertain earning
of the company.
• Due to lack of liquid
resources.
• Company sometimes fears
giving regular dividend.
• When business is not as
successful.
STABLE DIVIDEND POLICY
• Dividend is paid at fixed rate.
• Amount of dividend may or
may not vary every time.
• Helps in creating confidence
among the shareholders.
• Stabilizes the market value
of shares.
• Maintains the goodwill of the
company.
• Gives regular income to the
shareholders.
NO DIVIDEND POLICY

The Company May Use


This Type Of Dividend Policy
Due To Requirement Of
Funds For The Growth Of
The Company Or For The
Working Capital
Requirement.
DIVIDEND STRATEGY

Methods By Which Income On Portfolio Can Be Maximize


DIVIDEND GROWTH STRATGY

Dividend Growth
Strategy Is Adopted For
Attracting To Investors.
Under This Strategy
Dividend Paid To Investors
With Certain Percentage Of
Growth Rate Annually.
DIVIDEND CAPTURE STRATEGY
A timing-oriented
investment strategy revolving
around the purchase and sale
of dividend-paying stocks.

Many corporations engage


in dividend capture strategies
because of the limited amount
of tax that they must pay on
the dividend income of other
corporations.
DIVIDEND REINVESTMENT STRATEGY

The dividend
reinvestment plan is not
technically an investment
strategy but rather a tool
designed for long term
investing.
This allows investors to
purchase additional shares
of the stock by reinvesting
the dividends when enough
money is accrued.
DIVIDEND CALCULATION METHODS
DIVIDEND YIELD METHOD

Dividend Is Paid Out To


Shareholders Relative To
Market Value Per Share.
Computed By Dividend Per
Share Divided By The Market
Price Per Share And
Multiplying The Result By
100.
EARNING YIELD METHOD
Computed By Earning Per
Share For Most Recent 12
Month Period Divided By
Current Market Price And
Multiplying The Result By
100.
Where Earning Per Share Is
Calculated By Net Profit After
Tax Divided By Number Of
Share Outstanding.
PRICE EARNING RATIO METHOD
Price Earning Ratio
Method Is Computed By
Market Price Per Share
Divided By Earning Per
Share And Multiplying The
Result By 100.
Where Earning Per
Share Is Calculated By Net
Profit After Tax Divided By
No Of Share Outstanding.
CONCLUSION
• Dividends are Periodical Profits
shared by the Shareholders of
the Organisation.
• They aid Organisations to
maintain their Goodwill
• Shareholders enjoy benefits of
dividend for their financial
desires.
• Organisations may or may not
issue dividends depending upon
their various policies or
conditions.
SUMMARY
• Dividend is the profit of a company
shared by its shareholders.
• It is of various types, 4 of them being
the most common.
• Dividend is distributed according to
various policies of the organisation.
• Dividend declaration is not
mandatory
• Profit Maximisation can be done by
various Dividend strategies.
• Dividend is calculated by 3 methods.