Dividend Policy for Home Retail Group Plc and Yell Group Plc 2008, 2009, 2010

Once a company is profitable, the executives must determine what to do with the profits. The firm may continue to retain the profits, or it may pay out the profits to the owners/shareholders of the firm in the form of dividends. Once the firm decides on whether or not to pay dividends, it may establish a semi-permanent dividend policy, which may, of course, impact investors as well as the perception of the company in the global financial markets. See, Bhattacharyya, N. (2007). Dividend policy: a review, Managerial Finance, 33 (1), pp 4 -13.

What executives decide depends on the situation the company faces now, and is likely to face in the future. The policy also depends on the preferences of investors and potential investors. The most common dividend policies are as follows:

• Constant Dollar Dividend...
[ View Full Essay]