Strategies for the payment of dividends
Dividend policy is generally speaking the decisions on profit distribution of the company into two parts. One is paid to the shareholders, while the other is meant to be on the development objectives of the company.
As a rule, the profit achieved in a given year by the company is owned by its shareholders and they should be fully paid. Management of the company shall decide on the distribution of the profit only if they have grounds to believe that the money invested in the development will bring even greater profits.
There are different strategies for conducting dividend policy:
– Policy with constant dividend amount
– Policy with constant rate of dividend payments
– The surplus dividend policy
– The target dividend payout ratio
– Policy of hundred percent rate of dividend payments
– The zero dividend payout