Video: – 06.02.2024 [Sachin Education Hub – Notes]
Topic: – Stable dividend policy
Meaning of stable dividend policy [Sachin Education Hub – Notes]
A stable dividend policy refers to a consistent and predictable approach adopted by a company in distributing dividends to its shareholders over time. Under this policy, the company aims to maintain a steady or gradually increasing dividend payout to shareholders, typically on a regular basis, such as quarterly or annually.
Why to follow stable dividend policy? (Reasons for stability of dividend): – [Sachin Education Hub – Notes]
- A stable dividend policy ensures consistent and predictable dividend payments to shareholders. [Sachin Education Hub – Notes]
- It boosts investor confidence by signaling financial stability and consistent profitability. [Sachin Education Hub – Notes]
- Helps meet shareholder expectations for reliable income streams. [Sachin Education Hub – Notes]
- Enhances the company’s reputation in the market and may positively impact stock price. [Sachin Education Hub – Notes]
- Facilitates better capital structure management and allocation of profits. [Sachin Education Hub – Notes]
- Provides clarity to management regarding available funds for distribution. [Sachin Education Hub – Notes]
- Offers tax advantages for investors, particularly those preferring income stabilities. [Sachin Education Hub – Notes]
- Balances rewarding shareholders with retaining earnings for future growth. [Sachin Education Hub – Notes]
