Corporate Finance #15 Dividend Policy

Corporate Finance #15 Dividend Policy

Corporate Finance #15 Dividend Policy

Learn about factors involved in corporate dividend policy decisions from a certified public accountant (CPA)

Language: english

Note: 4.2/5 (17 notes) 17,595 students

Instructor(s): Robert (Bob) Steele

Last update: 2022-02-17

What you’ll learn

  • Explain the factors involved when making corporate dividend policy decisions
  • Describe dividend policy as it relates to phases in the corporate life cycle
  • Discuss the impact shareholders have over dividend policy
  • Explain dividend payment terms
  • Compare stock dividends and cash dividends
  • Describe when a company may use stock dividends
  • Discuss the concept of a stock split
  • Explain when a company may use a stock split

 

Requirements

  • Basic understanding of corporate finance concepts

 

Description

This course will cover corporate dividend policy.

We will include many example problems, both in the format of presentations and Excel worksheet problems. The Excel worksheet presentations will include a downloadable Excel workbook with at least two tabs, one with the answer, the second with a preformatted worksheet that can be completed in a step-by-step process along with the instructional videos.

Dividends represent earnings that a corporation distributes to owners. Dividends for a corporation can be compared do withdrawals from a sole proprietorship or partnership. However, there are substantial differences between a partnership withdrawal and a corporate dividend due to differences in the business structure.

A partner in a partnership generally has more control over the amount of draws they can take and when they can take them. Different partners may also draw different amounts at different times.

By contrast, a corporation must give uniform distributions of dividends to each class of shares, resulting in far less direct control by an individual shareholder to determine the amount of dividends or when they will be distributed.

The dividend distribution policy of a corporate can be very complex, involving many factors, including the life cycle of the company, the cash flow of the company, and the preferences of the shareholders.

A company that is in the growth phase of its life cycle is more likely to have smaller dividends, preferring to reinvest the money to grow operations. Shareholders who would like to invest over a longer time frame may like this policy because the increase in value of the company will increase the value of the shares.

A company in a mature phase of the life cycle may not have as much need to reinvest earnings and is more likely to distribute earnings to shareholders. Many investors like investing in dividend yielding companies because they receive a return on their investment in the form of dividends.

 

Who this course is for

  • Business students
  • Business professionals

 

Course content

  • Introduction
    • 1805 Dividend Policy
    • 1810 Other Things That Impact Dividend Policy
    • 1815 Dividend Payment Terms
    • 1820 Stock Dividend
    • 1825 Stock Split
  • Practice Probs. – Dividend Policy
    • OneNote Resource
    • 1813 Payout Ratio
    • 1814 Payout Ratio, Dividends Per Share, Dividend Yield
    • 1816 Retained Earnings & Dividend Limits
    • 1817 Dividend Projection Life Cycle
    • 1818 Stock Split & Stock Dividend
    • 1819 Dividend Payout Policy Analysis
    • 1820 Annual Dividend Yield, EPS, & Price Earnings Ratio
    • 1821 Earnings Per Share, Dividends Per Share, & Dividend Yield
    • 1822 Ex Dividend Stock Price
    • 1823 Stock Dividend & Cash Dividend Impact on Equity Section
    • 1825 Dividends vs Investment Analysis
    • 1826 Dividend Policy Impact on Price or Stock Value
    • 1827 Stock Split 3 for 1 and 2 for 1
    • 1828 Stock Dividend Impact on Equity & Investor Value
    • 1829 Stock Dividend & Impact on Investor Holdings
    • 1830 Reverse Stock Split
    • 1831 Stock Repurchase vs Cash Dividend
    • 1832 Dividend Payment Policy
  • Excel Probs. – Dividend Policy
    • 1813 Payout Ratio
    • 1814 Payout Ratio, Dividends Per Share, Dividend Yield
    • 1816 Retained Earnings & Dividend Limits
    • 1817 Dividend Projection Life Cycle
    • 1818 Stock Split & Stock Dividend
    • 1819 Dividend Payout Policy Analysis
    • 1820 Annual Dividend Yield, EPS, & Price Earnings Ratio
    • 1821 Earnings Per Share, Dividends Per Share, & Dividend Yield
    • 1822 Ex Dividend Stock Price
    • 1823 Stock Dividend & Cash Dividend Impact on Equity Section
    • 1825 Dividends vs Investment Analysis
    • 1826 Dividend Policy on Price of Stock Valuation
    • 1827 Stock Split 3 for 1 and 2 for 1
    • 1828 Stock Dividend Impact on Equity & Investor Value
    • 1829 Stock Dividend & Impact on Investor Holdings
    • 1830 Reverse Stock Split
    • 1831 Stock Repurchase vs Cash Dividend
    • 1832 Dividend Payment Policy

 

Corporate Finance #15 Dividend Policy

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