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Is it mandatory for each company to pay dividends to its shareholders?

August 16th, 2010 | | Tags: , | 2 Comments | |

moneycartoon

Also, if i am doing discount trading, how do i get dividends or do i dont get?
Is dividend variable depending on the profit made by the orgnisation?
how to evade taxes on income earned through and other financial instruments?
Please respond. Thanks

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2 Responses to “Is it mandatory for each company to pay dividends to its shareholders?”

  1. AGNIVA B Says:

    No it is not mandatory for any company however profitable to pay dividends. Let me explain dividends to you in short. If i am a company who wants to attract investors to invest in my stocks, the easiest way to do that is to pay them a fixed amount periodically for their investments, a lot like interest. For stocks it is called "dividend yield", often you’ll see this value for most stocks to be well below market interest rates. In spite of that investors do buy the stocks because they speculate on the capital gains (increase of value of equity) from the stock in addition to the dividends. Dividend yield is important if one holds the stock for a long time like Mutual Funds and Pension Funds. Dividend yields are not fixed either since it is decided by the company as to how much of their profits they want to payout as dividends.
    I am no tax guru..i know a good CPA and he takes care of everything, i always believe in getting a professional for best results.

  2. googie Says:

    Many companies do not pay dividends despite earnings.The Board of Directors decide the dividend policy depending upon the earnings, the growth objectives, the funded debt reduction policy and much depends upon the presentation by the operating officer of the company.You determine if the dividends are to be reinvested or paid directly to you. Can’t tell you how to evade taxes because when you are caught, I don’t want to be an accessory to your fraud.

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