|Residual dividend approach|
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Definition of Residual dividend approach
Residual dividend approach
An approach that suggests that a firm pay dividends if and only if acceptable
A dividend paid in cash to a company's shareholders. The amount is normally based on
A statistical methodology applied to a set of firms at a particular point in time.
A requirement that any missed preferred or preference stock dividends be paid
An analysis wherein the alternatives under consideration will provide the firm
A formula to estimate the intrinsic value of a firm by figuring the
A dividend is a portion of a company's profit paid to common and preferred shareholders. A stock
With respect to a project financing, an arrangement under which the sponsors of a project
A group of shareholders who prefer that the firm follow a particular dividend policy. For
A model for valuing the common stock of a company, based on the
A model wherein dividends are assumed to be at a constant rate in perpetuity.
A bond covenant that restricts in some way the firm's ability to pay cash dividends.
Percentage of earnings paid out as dividends.
Amount of cash paid to shareholders expressed as dollars per share.
An established guide for the firm to determine the amount of money it will pay as dividends.
The fixed or floating rate paid on preferred stock based on par value.
Dividend reinvestment plan (DRP)
Automatic reinvestment of shareholder dividends in more shares of a
A shareholders' rights to receive per-share dividends identical to those other shareholders receive.
Dividend yield (Funds)
Indicated yield represents return on a share of a mutual fund held over the past 12
Dividend yield (Stocks)
Indicated yield represents annual dividends divided by current stock price.
Dividends per share
dividends paid for the past 12 months divided by the number of common shares
Extra or special dividends
A dividend that is paid in addition to a firm's "regular" quarterly dividend.
This literally means "without dividend." The buyer of shares when they are quoted ex-dividend
The first day of trading when the seller, rather than the buyer, of a stock will be entitled to
Sale of some shares of stock to get cash that would be similar to receiving a cash dividend.
Total amount of dividends that would be paid on a share of stock over the next 12 months
Payment by a firm to its owners from capital rather than from earnings.
Optimization approach to indexing
An approach to indexing which seeks to Optimize some objective, such
Perfect market view (of dividend policy)
Analysis of a decision on dividend policy, in a perfect capital
1) Parts of stock returns not explained by the explanatory variable (the market-index return). They
Assets that remain after sufficient assets are dedicated to meet all senior debtholder's claims in full.
Related: equity claim
Lost wealth of the shareholders due to divergent behavior of the managers.
A method of allocating the purchase price for the acquisition of another firm among the
Related: unsystematic risk
Usually refers to the value of a lessor's property at the time the lease expires.
Risk premium approach
The most common approach for tactical asset allocation to determine the relative
approach to the determination of the optimal capital structure asserting that insiders in a
Signaling view (on dividend policy)
The argument that dividend changes are important signals to investors
Also referred to as an extra dividend. dividend that is unlikely to be repeated.
Payment of a corporate dividend in the form of stock rather than cash. The stock dividend
Stratified sampling approach to indexing
An approach in which the index is divided into cells, each
Tax differential view ( of dividend policy)
The view that shareholders prefer capital gains over dividends,
Traditional view (of dividend policy)
An argument that "within reason," investors prefer large dividends to
Variance minimization approach to tracking
An approach to bond indexing that uses historical data to
Purchase of shares in which the buyer is entitled to the forthcoming dividend. Related: exdividend.
A payment a company makes to stockholders. Earnings before income tax. The profit a company made
The payment of after-tax profits to shareholders as their share of the profits of the business for an accounting period.
Residual income (RI)
The profit remaining after deducting from profit a notional cost of capital on the investment in a business or division of a business.
Income that a company receives in the form of dividends on stock in other companies that it holds.
Amounts paid to the owners of a company that represent a share of the income of the company.
dividend payout ratio
Computed by dividing cash dividends for the year
dividend yield ratio
Cash dividends paid by a business over the most
The value attributed to a company to represent all future cash flows
dividend growth method
a method of computing the cost
net realizable value approach
a method of accounting for by-products or scrap that requires that the net realizable value of these products be treated as a reduction in the cost of the primary products; primary product cost may be reduced by decreasing either
realized value approach
a method of accounting for byproducts or scrap that does not recognize any value for these products until they are sold; the value recognized
the profit earned by a responsibility center that exceeds an amount "charged" for funds committed to that center
A payment made to shareholders that is proportional to the number of shares
Payment of cash by the firm to its shareholders.
constant-growth dividend discount model
Version of the dividend discount model in which dividends grow at a constant rate.
Periodic cash distribution from the firm to its shareholders.
dividend discount model
Computation of today’s stock price which states that share value equals the present value of all expected future dividends.
dividend payout ratio
Percentage of earnings paid out as dividends.
Date that determines whether a stockholder is entitled to a dividend payment; anyone holding stock before this date is entitled to a dividend.
information content of dividends
dividend increases send good news about cash flow and earnings. dividend cuts send bad news.
MM dividend-irrelevance proposition
Theory that under ideal conditions, the value of the firm is unaffected by dividend policy.
Also called economic value added. Profit minus cost of capital employed.
Distribution of additional shares to a firm’s stockholders.
Profits paid out to shareholders by a corporation.
Preferred Stock Stock that has a claim on assets and dividends of a corporation that are prior
to that of common stock. Preferred stock typically does not carry the right to vote.
As the term dividend relates to a corporation's earnings, a dividend is an amount paid per share from a corporation's after tax profits. Depending on the type of share, it may or may not have the right to earn any dividends and corporations may reduce or even suspend dividend payments if they are not doing well. Some dividends are paid in the form of additional shares of the corporation. dividends paid by Canadian corporations qualify for the dividend tax credit and are taxed at lower rates than other income.
Typically estimated based on the present value of the after-tax cash flows expected to be earned after the forecast period.
Unlike dividends which are paid to company shareholders, participating insurance policy dividends are not based on the company's overall profits. Rather, they are determined by grouping policies by type and country of issue and looking at how each class contributes to the company's earnings and surplus.
This policy governs Canada Life's actions regarding distribution of dividends to policyholders. It's goal is to achieve a dividend distribution that is equitable and timely, and which gives full recognition of the need to ensure the ongoing solidity of the company. It also specifies that distribution to individual policyholders must be equitable between dividend classes and policyholder generations, and among policyholders within any class.
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