Based on the stated goals, it is possible to determine the range of tasks that the DP solves.
Posted: Wed Jan 22, 2025 10:50 am
In general philosophy, the goal is the result that is expected to be obtained at the end of any activity. Dividend policy also has its own guidelines. Usually, the main one comes down to a combination of maximum consumption of profit from the company and investments in its development, aimed at increasing the capitalization of the enterprise.
Several other goals of the DP are also identified:
formation of a clear and consistent mechanism for decision-making by shareholders on issues related to the amount, form, frequency, and procedure for paying out shares of profits;
drafting rules that govern the adoption and amendment of dividend policy.
Based on the stated goals, it is possible to determine the range of tasks that the DP solves.
Download a free selection of tools for calculating KPIs and increasing marketing metrics
Alexander Kuleshov
Alexander Kuleshov
General Director of Sales Generator LLC
Read more posts on my personal blog:
Over the past 7 years, we have usages of car owner database conducted over 23,000 comprehensive website audits and I have learned that all of us as leaders need clear and working algorithms for our marketing and sales.
Today we will share with you 6 of the most valuable documents that we have developed for our clients.
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Step-by-step guide to creating marketing KPIs
Template for calculating KPIs for a marketer
9 Examples of Universal Selling Commercial Proposals
Upgrade your CPs to close more deals
How to make KPI for the sales department so that profits grow by 20% or more?
Step-by-step template for calculating KPIs for OP managers
Checklist of 12 main indicators for website promotion
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Types and kinds of dividend policy
The science of enterprise economics has developed three approaches to determining a company's dividend policy. All of them are discussed in the table below.
Types of dividend policy Type of dividend payment method
Conservative Dividends are paid when the company's development costs are fully met, if resources remain. The size of the shares is fixed.
Moderate (compromise) A fixed amount of dividends is paid in any case; when the company receives excess profits, the size of the shares increases.
Aggressive The size of dividends is steadily increasing, payments are made systematically.
Conservative dividend payment methodology
The conservative method involves paying dividends when the company fully meets its needs for financial resources necessary for further growth. Here, the ratio of the internal rate of return and the weighted average cost of capital is taken into account. If the former is higher, then the largest share of the profit is directed to increasing the funds of the company's owners.
The advantage of such a policy is obvious – it allows ensuring the financial stability of the company. However, it is unattractive for investors, since it makes dividend payments unstable. This approach is typical for newly formed JSCs that have not yet managed to use the financial resources attracted from investors in production.
Conservative dividend payment methodology
Several other goals of the DP are also identified:
formation of a clear and consistent mechanism for decision-making by shareholders on issues related to the amount, form, frequency, and procedure for paying out shares of profits;
drafting rules that govern the adoption and amendment of dividend policy.
Based on the stated goals, it is possible to determine the range of tasks that the DP solves.
Download a free selection of tools for calculating KPIs and increasing marketing metrics
Alexander Kuleshov
Alexander Kuleshov
General Director of Sales Generator LLC
Read more posts on my personal blog:
Over the past 7 years, we have usages of car owner database conducted over 23,000 comprehensive website audits and I have learned that all of us as leaders need clear and working algorithms for our marketing and sales.
Today we will share with you 6 of the most valuable documents that we have developed for our clients.
Download for free and implement today:
Step-by-step guide to creating marketing KPIs
Template for calculating KPIs for a marketer
9 Examples of Universal Selling Commercial Proposals
Upgrade your CPs to close more deals
How to make KPI for the sales department so that profits grow by 20% or more?
Step-by-step template for calculating KPIs for OP managers
Checklist of 12 main indicators for website promotion
Find out what metrics are needed to properly optimize your website
40 Services for Working with Blog Content
We have collected the best services for working with content
How to define your target audience without mistakes?
A proven guide to defining a company's target audience
Download the collection for free
pdf 8.3 mb
doc 3.4 mb
Already downloaded
153347
Types and kinds of dividend policy
The science of enterprise economics has developed three approaches to determining a company's dividend policy. All of them are discussed in the table below.
Types of dividend policy Type of dividend payment method
Conservative Dividends are paid when the company's development costs are fully met, if resources remain. The size of the shares is fixed.
Moderate (compromise) A fixed amount of dividends is paid in any case; when the company receives excess profits, the size of the shares increases.
Aggressive The size of dividends is steadily increasing, payments are made systematically.
Conservative dividend payment methodology
The conservative method involves paying dividends when the company fully meets its needs for financial resources necessary for further growth. Here, the ratio of the internal rate of return and the weighted average cost of capital is taken into account. If the former is higher, then the largest share of the profit is directed to increasing the funds of the company's owners.
The advantage of such a policy is obvious – it allows ensuring the financial stability of the company. However, it is unattractive for investors, since it makes dividend payments unstable. This approach is typical for newly formed JSCs that have not yet managed to use the financial resources attracted from investors in production.
Conservative dividend payment methodology