After reading this article you will learn about Dividend Policy:- 1. Definition of Dividend Policy 2. Classification of Dividend Policy 3. Concepts. Definition of Dividend Policy: Dividend may be defined as divisible profit which is distributed amongst the members of a company in proportion to their shares in such a manner as is prescribed by the Memorandum and Articles of [...]
This article throws light upon the top three theories of dividend policy. The theories are: 1. Modigliani-Miller (M-M) Hypothesis 2. Walter's Model 3. Gordon's Model. Theory # 1. Modigliani-Miller (M-M) Hypothesis: Modigliani-Miller hypothesis provides the irrelevance concept of dividend in a comprehensive manner. According to them, the dividend policy of a firm is irrelevant since, it does not have any [...]
After reading this article you will learn about Bonus Shares:- 1. Meaning of Bonus Shares 2. Companies Act and Bonus Issue 3. Advantages 4. Disadvantages 5. Revised Directives of Central Government. Meaning of Bonus Shares: Sometimes a company cannot pay dividend in cash due to shortage of liquid funds, viz., cash, in spite of earning a large amount of profit [...]