Regular dividend policy regular stable 20 30 40 50 60

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Regular Dividend Policy Regular (stable) Dividend 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Value in $ EPS DPS
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Low-Regular-and-Extra Dividend Policy Using this policy, firms pay a low regular dividend , supplemented by additional dividends when earnings can support it. When earnings are higher than normal, the firm will pay this additional dividend, often called an extra dividend , without the obligation to maintain it during subsequent periods. This type of policy is often used by firms whose sales and earnings are susceptible to swings in the business cycle.
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Rationale for Dividend Stability Companies generally follow a policy of stable dividends or gradually rising dividends. Reasons could be: Many individual investors reckon dividend as a recurring income to meet their needs Dividend decision is seen as an indicator of the future prospects of the firm. Institutional investors often view a record of steady dividend payment as a highly desirable feature for investing in the firm’s equity
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  • Fall '19
  • Dividend, Dividend yield, equity shares, dividend decision

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