what is the logic behind declaration of interim dividend? ?
Replies (6)
Quick Summary
The discussion clarifies the rationale behind declaring interim dividends. It serves to reward shareholders for their support and aids in their tax planning. Furthermore, an interim dividend signals the company's financial health and its capacity to potentially pay a final dividend, offering investors confidence in their investment.
It is to keep the shareholders safe and to thank them for their support because one of the dividend policies- clientele effect- ensures prompt dividend payment will help the investors to meet their tax obligations/planning.
Ok....then on the other side, share holders can know about solvency of company that company can declare interim dividend that means we can obtain maximum benefit by investing in this company....and company which can declare interim dividend will be enough capable for payment of final dividend also....is it correct? ?
Yeah, some companies publish in the financial statements, that they have paid dividends even during tough times to portray their financial strategy to nurture SWM philosophy.
It’s not a problem wlc. I didn’t prove it mathematically yet, but market cap with OPTIMAL share price, maximises SWM. Paying dividends is discretionary company policy.