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why do companies pay dividends at different times of the year?
why do companies pay dividends at different times of the year?
has it got to do with when they listed their IPO?
also does the share price increase (all other things being equal) as time approaches dividend payment?
4 Answers
- 1 decade agoFavorite Answer
Companies pay dividends to pay out money that couldn't be invested within the company. Dividend payments change from company to company, it has nothing to do with their IPO. Some companies pay dividends once a year, some once a quarter.
The way a dividend works is a company announces when it'll pay it. It will also announce a date in which shares must have been owned by in order to be owed that dividend.
So yes, a stock will push upward around dividend payment time for a company that is very methodical about the way it pays out. However, if its a company without a known track record for dividend payment the stock price will generally not lurch forward.
- Common SenseLv 71 decade ago
Companies are allowed to pay dividends when they want to. It's that simple.
Many people factor in pending dividends into the share price when evaluating a stock.
- 1 decade ago
This increases the confidence in the firm and they can mop up resources at good premium.
