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Dividend Policy CF
Dividend Policy CF
Dividend policy is the policy a company uses to structure its dividend payout to shareholders.
Some researchers suggest that dividend policy may be irrelevant, in theory, because
investors can sell a portion of their shares or portfolio if they need funds. This is the "dividend
irrelevance theory," and it infers that dividend payouts have minimal impact on stock price.
Dividend policy
Apart from the above, the Board also considers past dividend history and sense of
shareholders’ expectations while determining the rate of dividend. The Board may
additionally recommend special dividend in special circumstances. The Board may
consider not declaring dividend or may recommend a lower payout for a given financial
year, after analyzing the prospective opportunities and threats or in the event of
challenging circumstances such as regulatory and financial environment. In such event,
the Board will provide rationale in the Annual Report.