Dividend Policy

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DEFINITION of 'Dividend Policy'

The policy a company uses to decide how much it will pay out to shareholders in dividends.

INVESTOPEDIA EXPLAINS 'Dividend Policy'

Lots of research and economic logic suggests that dividend policy is irrelevant (in theory).

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  5. Record Date

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  6. Ex-Dividend

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RELATED FAQS
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    Because the CEO is responsible for leading both the company’s short- and long-term strategies, the stock price reflects the ... Read Full Answer >>
  2. I would like to invest in a dividend-paying stock. How can I find out which stocks ...

    There are several accessible sources to help investors identify dividend-paying stocks. Here are a few we can recommend:   Generally, ... Read Full Answer >>
  3. If a long call is owned on the record date of a stock, is the owner of the option ...

    The owner of a long call for a stock is entitled to a dividend only if the option is exercised prior to the ex-dividend date, ... Read Full Answer >>
  4. When can I use the Dividend Discount Method (DDM) to value a stock?

    Investors can use the dividend discount model (DDM) for stocks that have just been issued or that have traded on the secondary ... Read Full Answer >>
  5. What is the average annual dividend yield of companies in the Internet sector?

    The average annual dividend yield of companies in the Internet sector is 0.02%. The dividend payout ratio for the sector ... Read Full Answer >>
  6. How is perpetuity used in the Dividend Discount Model?

    The basic dividend discount model (DDM) creates an estimate of the constant growth rate, in perpetuity, expected for dividends ... Read Full Answer >>
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