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Dividend policy-Quiz to check your knowledge!

Dividend policy-Quiz to check your  knowledge!

Dividend policy can be understood as set of guidelines a company uses to decide how much of its earnings it will pay out to shareholders.Dividend refers to the business concerns net profits distributed among the shareholders. It may also be termed as the part of the profit of a business concern, which is distributed among its shareholders.

Dividend decision of the business concern is one of the crucial parts of the financial manager,because it determines the amount of profit to be distributed among shareholders and amount of profit to be treated as retained earnings for financing its long term growth. Hence,dividend decision plays very important part in the financial management.Dividend decision consists of two important concepts which are based on the relationship between dividend decision and value of the firm.

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