B Com Exam > B Com Notes > Accountancy and Financial Management > Introduction - Dividend Decision, Accountancy and Financial Management
Introduction - Dividend Decision, Accountancy and Financial Management | Accountancy and Financial Management - B Com PDF Download
Introduction
The financial manager must take careful decisions on how the profit should be distributed among shareholders. It is very important and crucial part of the business concern, because these decisions are directly related with the value of the business concern and shareholder’s wealth. Like financing decision and investment decision, dividend decision is also a major part of the financial manager. When the business concerns decide dividend policy, they have to consider certain factors such as retained earnings and the nature of shareholder of the business concern.
Meaning of Dividend
Dividend refers to the business concerns net profits distributed among the shareholders. It may also be termed as the part of the profit of a business concern, which is distributed among its shareholders. According to the Institute of Chartered Accountant of India, dividend is defined as “a distribution to shareholders out of profits or reserves available for this purpose”.
Types of Dividend/ Form of Dividend
Dividend may be distributed among the shareholders in the form of cash or stock. Hence, Dividends are classified into:
A. Cash dividend
B. Stock dividend
C. Bond dividend
D. Property dividend
Fig. Types of Dividend
Cash Dividend
If the dividend is paid in the form of cash to the shareholders, it is called cash dividend. It is paid periodically out the business concerns EAIT (Earnings after interest and tax). Cash dividends are common and popular types followed by majority of the business concerns.
Stock Dividend
Stock dividend is paid in the form of the company stock due to raising of more finance. Under this type, cash is retained by the business concern. Stock dividend may be bonus issue. This issue is given only to the existing shareholders of the business concern.
Bond Dividend
Bond dividend is also known as script dividend. If the company does not have sufficient funds to pay cash dividend, the company promises to pay the shareholder at a future specific date with the help of issue of bond or notes.
Property Dividend
Property dividends are paid in the form of some assets other than cash. It will distributed under the exceptional circumstance. This type of dividend is not published in India.
The document Introduction - Dividend Decision, Accountancy and Financial Management | Accountancy and Financial Management - B Com is a part of the B Com Course Accountancy and Financial Management.
All you need of B Com at this link: B Com
|
44 videos|75 docs|18 tests
|
FAQs on Introduction - Dividend Decision, Accountancy and Financial Management - Accountancy and Financial Management - B Com
| 1. What is the dividend decision in accountancy and financial management? |  |
Ans. The dividend decision in accountancy and financial management refers to the process of determining the amount of profit that should be distributed to shareholders as dividends and the amount that should be retained in the company for future growth and investment.
| 2. How is the dividend decision influenced by financial management? | |
Ans. The dividend decision is influenced by financial management as it considers various factors such as the company's profitability, cash flow position, capital requirements, and growth opportunities. Financial managers analyze these factors to determine the optimal dividend payout ratio, which strikes a balance between rewarding shareholders and reinvesting in the business.
| 3. What are the factors that affect the dividend decision? | |
Ans. Several factors can influence the dividend decision, including the company's earnings, cash flow, profitability, liquidity, debt levels, growth prospects, and shareholder expectations. Additionally, external factors such as economic conditions, industry trends, and legal requirements may also impact the dividend decision.
| 4. How does the dividend decision impact shareholders? | |
Ans. The dividend decision directly impacts shareholders as it determines the amount of profit they receive as dividends. A higher dividend payout may attract income-seeking investors and increase the company's stock price, while a lower dividend payout may indicate that the company is retaining earnings for future growth. Ultimately, the dividend decision affects shareholders' income and their perception of the company's financial health.
| 5. What are the advantages and disadvantages of dividend payments? | |
Ans. The advantages of dividend payments include providing regular income to shareholders, attracting investors, signaling financial stability, and reducing the company's retained earnings. On the other hand, the disadvantages of dividend payments include reducing the company's ability to reinvest in growth opportunities, increasing the company's borrowing costs, and potentially disappointing investors if dividends are reduced or omitted. Financial managers must carefully consider these pros and cons when making the dividend decision.
Related Exams
About this Document
|
4.68/5 Rating |
|
Dec 23, 2024 Last updated |
Document Description: Introduction - Dividend Decision, Accountancy and Financial Management for B Com 2024 is part of Accountancy and Financial Management preparation.
The notes and questions for Introduction - Dividend Decision, Accountancy and Financial Management have been prepared according to the B Com exam syllabus. Information about Introduction - Dividend Decision, Accountancy and Financial Management covers topics
like and Introduction - Dividend Decision, Accountancy and Financial Management Example, for B Com 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises and tests below for Introduction - Dividend Decision, Accountancy and Financial Management.
Introduction of Introduction - Dividend Decision, Accountancy and Financial Management in English is available as part of our Accountancy and Financial Management
for B Com & Introduction - Dividend Decision, Accountancy and Financial Management in Hindi for Accountancy and Financial Management course.
Download more important topics related with notes, lectures and mock test series for B Com
Exam by signing up for free. B Com: Introduction - Dividend Decision, Accountancy and Financial Management | Accountancy and Financial Management - B Com
Description
Full syllabus notes, lecture & questions for Introduction - Dividend Decision, Accountancy and Financial Management | Accountancy and Financial Management - B Com - B Com | Plus excerises question with solution to help you revise complete syllabus for Accountancy and Financial Management | Best notes, free PDF download
Information about Introduction - Dividend Decision, Accountancy and Financial Management
In this doc you can find the meaning of Introduction - Dividend Decision, Accountancy and Financial Management defined & explained in the simplest way possible. Besides explaining types of
Introduction - Dividend Decision, Accountancy and Financial Management theory, EduRev gives you an ample number of questions to practice Introduction - Dividend Decision, Accountancy and Financial Management tests, examples and also practice B Com
tests
|
44 videos|75 docs|18 tests
|
Download as PDF
|
Explore Courses for B Com exam
|
|
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
Related Searches
Semester Notes
,Objective type Questions
,Introduction - Dividend Decision
,Previous Year Questions with Solutions
,Extra Questions
,Sample Paper
,Accountancy and Financial Management | Accountancy and Financial Management - B Com
,practice quizzes
,shortcuts and tricks
,Accountancy and Financial Management | Accountancy and Financial Management - B Com
,Free
,Important questions
,Viva Questions
,mock tests for examination
,video lectures
,Accountancy and Financial Management | Accountancy and Financial Management - B Com
,ppt
,Introduction - Dividend Decision
,past year papers
,Summary
,Introduction - Dividend Decision
,MCQs
,study material
,Exam
;
Additional Information about Introduction - Dividend Decision, Accountancy and Financial Management for B Com Preparation
Introduction - Dividend Decision, Accountancy and Financial Management Free PDF Download
The Introduction - Dividend Decision, Accountancy and Financial Management is an invaluable resource that delves deep into the core of the B Com exam.
These study notes are curated by experts and cover all the essential topics and concepts, making your preparation more efficient and effective.
With the help of these notes, you can grasp complex subjects quickly, revise important points easily,
and reinforce your understanding of key concepts. The study notes are presented in a concise and easy-to-understand manner,
allowing you to optimize your learning process. Whether you're looking for best-recommended books, sample papers, study material,
or toppers' notes, this PDF has got you covered. Download the Introduction - Dividend Decision, Accountancy and Financial Management now and kickstart your journey towards success in the B Com exam.
Importance of Introduction - Dividend Decision, Accountancy and Financial Management
The importance of Introduction - Dividend Decision, Accountancy and Financial Management cannot be overstated, especially for B Com aspirants.
This document holds the key to success in the B Com exam.
It offers a detailed understanding of the concept, providing invaluable insights into the topic.
By knowing the concepts well in advance, students can plan their preparation effectively.
Utilize this indispensable guide for a well-rounded preparation and achieve your desired results.
Introduction - Dividend Decision, Accountancy and Financial Management Notes
Introduction - Dividend Decision, Accountancy and Financial Management Notes offer in-depth insights into the specific topic to help you master it with ease.
This comprehensive document covers all aspects related to Introduction - Dividend Decision, Accountancy and Financial Management.
It includes detailed information about the exam syllabus, recommended books, and study materials for a well-rounded preparation.
Practice papers and question papers enable you to assess your progress effectively.
Additionally, the paper analysis provides valuable tips for tackling the exam strategically.
Access to Toppers' notes gives you an edge in understanding complex concepts.
Whether you're a beginner or aiming for advanced proficiency, Introduction - Dividend Decision, Accountancy and Financial Management Notes on EduRev are your ultimate resource for success.
Introduction - Dividend Decision, Accountancy and Financial Management B Com Questions
The "Introduction - Dividend Decision, Accountancy and Financial Management B Com Questions" guide is a valuable resource for all aspiring students preparing for the
B Com exam. It focuses on providing a wide range of practice questions to help students gauge
their understanding of the exam topics. These questions cover the entire syllabus, ensuring comprehensive preparation.
The guide includes previous years' question papers for students to familiarize themselves with the exam's format and difficulty level.
Additionally, it offers subject-specific question banks, allowing students to focus on weak areas and improve their performance.
Study Introduction - Dividend Decision, Accountancy and Financial Management on the App
Students of B Com can study Introduction - Dividend Decision, Accountancy and Financial Management alongwith tests & analysis from the EduRev app,
which will help them while preparing for their exam. Apart from the Introduction - Dividend Decision, Accountancy and Financial Management,
students can also utilize the EduRev App for other study materials such as previous year question papers, syllabus, important questions, etc.
The EduRev App will make your learning easier as you can access it from anywhere you want.
The content of Introduction - Dividend Decision, Accountancy and Financial Management is prepared as per the latest B Com syllabus.
|
© EduRev
|
Education Revolution
|
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup