Dividend Policy of Large Publicly-Traded Company: Tesco
Assignment Title:
Dividend Policy of Large Publicly-Traded Company: TESCO
Kristina Danielyan
Student ID: I075807
CONTENT
1. Introduction……………………………………………………………………Page 2 2. DIVIDEND POLICY………………………………………………………….Page 2 2.1. Dividend Policies: advantages and Disadvantages …………………………Page 3 2.1.1. Fixed Percentage pay-out ratio Policy……………………………………..Page 3 2.1.2. ZERO Dividend Payment Policy …………………………………………..Page 3 2.1.3. Constant or Steadily Increasing Dividend Policy………………………….Page 3 2.2. Dividend Policies in Practice………………………………………………….Page 4 2.3. Effect of Dividend Policy on Shareholder Wealth…………………………..Page 5 3. CONCLUSION…………………………………………………………………..Page 5 Reference………………………………………………………………………...Page 6 Bibliography…………………………………………………………………..…Page 7
1. Introduction
What is Dividend? What are the Dividend Policies for? How they work and what are their advantages and disadvantages?
Let’s find the answers to these simple questions and after we have them, let’s determine and evaluate the dividend policy of TESCO based on the information we have from published sources.
2. DIVIDEND POLICY
Dividend is a cash payment made to shareholders on a quarterly or semiannual basis by a company. Both dividends and associated with the tax liabilities are cash transactions therefore managers of the company should appreciate the real effect of the proposed dividends on the Liquidity position of Company ,even though if company performs high level of profit.
Actually, the Dividend Decision of the company, which judges between the earnings to be retained and the amount to be distributed to shareholders, is interrelated with two main decisions of the company: the investment decision, when the appropriate investment decisions on profitable projects are being made and finance
Dividend Policy of Large Publicly-Traded Company: TESCO
Kristina Danielyan
Student ID: I075807
CONTENT
1. Introduction……………………………………………………………………Page 2 2. DIVIDEND POLICY………………………………………………………….Page 2 2.1. Dividend Policies: advantages and Disadvantages …………………………Page 3 2.1.1. Fixed Percentage pay-out ratio Policy……………………………………..Page 3 2.1.2. ZERO Dividend Payment Policy …………………………………………..Page 3 2.1.3. Constant or Steadily Increasing Dividend Policy………………………….Page 3 2.2. Dividend Policies in Practice………………………………………………….Page 4 2.3. Effect of Dividend Policy on Shareholder Wealth…………………………..Page 5 3. CONCLUSION…………………………………………………………………..Page 5 Reference………………………………………………………………………...Page 6 Bibliography…………………………………………………………………..…Page 7
1. Introduction
What is Dividend? What are the Dividend Policies for? How they work and what are their advantages and disadvantages?
Let’s find the answers to these simple questions and after we have them, let’s determine and evaluate the dividend policy of TESCO based on the information we have from published sources.
2. DIVIDEND POLICY
Dividend is a cash payment made to shareholders on a quarterly or semiannual basis by a company. Both dividends and associated with the tax liabilities are cash transactions therefore managers of the company should appreciate the real effect of the proposed dividends on the Liquidity position of Company ,even though if company performs high level of profit.
Actually, the Dividend Decision of the company, which judges between the earnings to be retained and the amount to be distributed to shareholders, is interrelated with two main decisions of the company: the investment decision, when the appropriate investment decisions on profitable projects are being made and finance
Bibliography: 1. R.Azhagaiah and Sabari Pria.N. “The Impact of Dividend Policy on Shareholder’s Wealth” published in 2008, International Research Journal of Finance and Economic (available under www.eurojournals.com) 2. Denzil Watson and Antony Head , Corporate Finance Principals and Practice (4th edition), Chapter 1, page 7, Exibit 1.2 3. Jim Miller, Dividend facts you may not know, (2009) published in Investopedia (available under www.investopedia.com) 4. Dividend Reinvestment Plans, Wealth Daily, Independent Investment Analysis and Commentary Special Report, available under (www.wealthdaily.com)