Quick Answer: What Is The Stable Dividend Policy?


What is stability of dividend?

ADVERTISEMENTS: Stability of dividends sometimes means regularity in paying some dividend annually, even though the amount of dividend may fluctuate from year to year and may not be related with earnings. There are a number of companies which have records of paying dividend for a long unbroken period.

What is stable dividend policy in financial management?

Stable dividend policy. This is also called Regular policy in this company pays dividend at fixed rate, and maintains it for long time even the profit fluctuates. It pays minimum amount of dividend every year regularly. A firm paying this can satisfy the shareholders and can enhance the credit in market.

What are the advantages of stable dividend policy?

A stable dividend policy is advantageous to both the investors and the company on account of the following: (a) It is sign of continued normal operations of the company. ADVERTISEMENTS: (b) It stabilises the market value of shares.

What is meant by dividend policy?

Definition: The Dividend Policy is a financial decision that refers to the proportion of the firm’s earnings to be paid out to the shareholders. The amount of earnings to be retained back within the firm depends upon the availability of investment opportunities.