Dividend Policy and Dividend Payout Ratio: A Basic Overview

You may already know that the value of owning shares of stock is that you can earn money from stocks. Meaning, if a share of stock doesn't earn you any money, then it is nothing more than a piece of paper. How do you earn money from owning stocks? It's when you benefit from the earnings of the corporation which your stocks represent. How does the corporation transfer that money to you? It does so in the form of dividends. The most basic type of dividends is cash dividends. The corporation earns money, and then it pays you cash for your share of the profits. However, is a higher dividend payout ratio really

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