Dividends are the various forms of securities that a issuer distributes to its shareholders according to the level of their shareholding. In the company’s own capital. Dividends are considered to be conditional, regardless of whether the company has income or current profit.
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For ordinary shares, a portion of the dividends will be withheld for tax payment to the state and the remaining portion will be given to the shareholders. Dividend size is related to the amount of equity securities circulating in the securities market.
However, dividends are generally larger than the amount of savings, so they are still more attractive to investors than some investment options, such as bank deposits. To take interest and so on.
The purpose of the dividend payment depends on the dividend policy of the issuer. This dividend payment policy depends on many factors, such as the situation, opportunities, needs, plans and policies of the company.
A company that does not pay dividends can be a sign that the company is financially insolvent or unprofitable in its business operations. Even if the company does not have financial incapacity or is profitable in its business operations, the company is risking its business at risk. And the risk of perceiving the company to be financially insolvent or unprofitable in the course of its business.
In particular, the company is thought to have no interest in investors or shareholders, as shareholders may eventually end up investing and selling. Its securities. Normal flow When the company does not pay dividends, the price of equity securities in the market will fall.
But when a company pays dividends, there is no current that guarantees that the price of equity on the market will go up. These are due to the form of dividend payment of the company and the reasons that lead to the payment of dividends in all forms.