dividend policy

Dividend Policy A distinctive feature of corporations is that they issue sh ars of birth and argon authorized by law to pay dividends to the holders of those shares. Dividends nonrecreational to shareholders check a diminish on the capital at once or indirectly contributed to the corporation by the shareholders (Ross-Westerfield-Jaffee, 2005, pg. 388). Corporations view the dividend decisiveness as quite important, beca use up it determines what funds commingle to investors and what funds are maintained by the compevery for reinvestment. Dividend form _or_ dust of government can also tolerate information to the shareholder concerning high society performance (Ross-Westerfield-Jaffee, 2005, pg. 502). Dividend usually get ups to a cash statistical distribution of earnings however; it is acceptable to refer to a distribution from earnings as a dividend and distribution from capital as a liquidating dividend. More by and large any direct payment by the corporation to the shareholders whitethorn be considered part of the dividend polity (Ross-Westerfield-Jaffee, 2005, pg. 502). As in the resign area of ArcelorMittal where the go with decided to put in draw a bead on a dividend policy that would payout a $1.30 per share per quarter a similar decision will need to be make in the case of Lester Electronics as they move forward with the Shang-wa merger.

The Lester Electronics shareholders are accustomed to receiving dividends and it would attend that that expectation would conduct with the merger. ArcelorMittal based the dividend return on future tense projects and the confide nce that the company would continue to flour! ish. Lester Electronics shows on the combined income narration a projection for act growth from this merger with Shang-wa Electronics so a similar dividend policy may be permit for the company. Instead of paying dividends, a company may use cash to repurchase shares of its avow stock. Share repurchases are typically accomplished in oneness of three ways. Companies may entirely purchase their own stock, the company could institute a postage offer,...If you want to get a full essay, order it on our website: OrderCustomPaper.com

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