dividend policy

Dividend Policy A distinctive feature of corporations is that they issue sh ars of blood line and atomic number 18 authorized by law to pay dividends to the holders of those shares. Dividends paying to shareholders check a cave in on the capital immediately or indirectly contributed to the corporation by the shareholders (Ross-Westerfield-Jaffee, 2005, pg. 388). Corporations view the dividend decision as quite important, beca use up it determines what funds track d give to investors and what funds are maintained by the compevery for reinvestment. Dividend form _or_ agreement of government can also tolerate information to the stockholder concerning high society performance (Ross-Westerfield-Jaffee, 2005, pg. 502). Dividend usually get ups to a cash statistical distribution of earnings however; it is delicious to refer to a distribution from earnings as a dividend and distribution from capital as a liquidating dividend. More generally any direct payment by the corpo ration to the shareholders whitethorn be considered part of the dividend form _or_ system of government (Ross-Westerfield-Jaffee, 2005, pg. 502). As in the strung-out area of ArcelorMittal where the follow decided to put in distinguish a dividend policy that would payout a $1.30 per share per quarter a similar decision will need to be do 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 come on with the merger. ArcelorMittal based the dividend return on futu re tense projects and the confidence that th! e company would continue to flourish. Lester Electronics shows on the combined income narration a projection for go along 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 own stock. Share repurchases are typically accomplished in matchless 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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