Section 1
Introduction to Dividends
Book
Version 3
By Boundless
By Boundless
Boundless Finance
Finance
by Boundless
5 concepts
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Defining Dividends
Dividends are a portion of company earnings regularly paid to shareholders, paid as some fixed amount per share price.
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The Nature of Dividends
Dividends are attractive to many investors because they are seen as steady streams of income from low risk investments.
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Dividend Irrelevance Theory
Under perfect market conditions, stockholders would ultimately be indifferent between returns from dividends or returns from capital gains.
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Value of a Low Dividend
Low dividend payouts can be interpreted in a number of ways, including: as a leading indicator of future growth or a sign of instability.
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Value of a High Dividend
High dividend yields are attractive to investors who desire current income and stability since established firms often offer such stocks.