About This Chapter
Dividends & Dividend Policy -- Chapter Summary and Learning Objectives
This chapter covers the ways that companies share profits with investors and how various factors influence the manner in which these policies are structured by companies. You will also discover how investors may react according to their individual situation or goals. These lessons come with lesson quizzes and practice exams to help ensure you are retaining the information you need. Our instructors will teach you about:
- Cash dividends
- Dividend payment
- Homemade dividends
- Low and high dividend payouts
- Information content of dividends
- The clientele effect
- Stock repurchase
- Stock dividends and splits
|Cash Dividends & Dividend Payment||Understand dividend payment and its history.|
|Homemade Dividends: Definition & Examples||Learn about homemade dividends.|
|Low Dividend Payout: Real World Factors||Discover why companies sometimes purposefully limit their dividend payouts.|
|Factors Favoring High Dividend Payouts||Discuss reasons for the use of high dividend payouts.|
|Understanding Information Content of Dividends & Clientele Effect||Look at what dividend policy is communicating to investors and about the clientele effect.|
|Stock Repurchase: Definition & Benefits||Learn why a company will pay investors to buy its own stock.|
|What Are Stock Dividends & Stock Splits?||Examine different methods companies use to increase shares of their stock.|
1. Cash Dividends & Dividend Payment
When a company decides to pay a dividend to shareholders, they first have to decide what type of dividend to pay. In this lesson, we'll examine the most common types of dividends and look at the timeline for cash dividend payments.
2. Homemade Dividends: Definition & Examples
A company sets the dividend that they will pay per share. But individual investors can also set their own per-share dividend level through a method known as homemade dividends. Read this lesson to find out how to create homemade dividends.
3. Low Dividend Payout: Real World Factors
After reading this lesson, you will see why some companies prefer to give low dividend payouts instead of higher dividend payouts. Learn why this can benefit both the business and the investor.
4. Factors Favoring High Dividend Payouts
Many investors prefer a high cash dividend payout, but they might prefer it for different reasons. In this lesson, we'll examine what factors could lead individual and institutional investors to favor high cash dividend payouts.
5. Understanding Information Content of Dividends & Clientele Effect
What does the dividend level say about the company giving out the dividend? And should companies set their dividend levels to try to please their shareholders? In this lesson, we'll explore two theories about dividends: the information content theory and clientele effect.
6. Stock Repurchase: Definition & Benefits
Good companies generate cash. Great companies handle that cash correctly, and there are a few different ways to do that. In this lesson, we'll discuss one of them for a publicly-traded company - buying back their own stock.
7. What Are Stock Dividends & Stock Splits?
In this lesson, we'll define corporation, shareholders, and stock. You'll also learn the benefits of stock ownership: dividends, capital gains, voting privileges, and stock splits. We'll also discuss the disadvantages of stock ownership.
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Other chapters within the Finance 101: Principles of Finance course
- Introduction to Corporate Finance
- Financial Statements, Taxes & Cash Flow
- Financial Statement Basics
- Long-Term Financial Planning & Growth
- Introduction to Valuation Methods
- Discounted Cash Flow Valuation
- Interest Rates & Bond Valuation
- Stock Valuation
- Net Present Value & Investment Basics
- Capital Investment Decisions
- Accounting Risk & Return
- Return, Risk, & the Security Market Line
- Options & Corporate Finance
- Cost of Capital
- Financial Leverage & Capital Structure
- Short-Term Financing & Planning
- Cash & Liquidity Management
- Credit & Inventory Management
- International Corporate Finance
- Studying for Finance 101