Advantage And Disadvantages Of Dividend Payout Policy Finance Essay

Advantage And Disadvantages Of Dividend Payout Policy Finance Essay When a company has a surplus of profit, it can be used either pay back the shareholders or reinvest into the business. The way that company pay back to shareholders is call dividend payout. In the recent years, the number of companies paying dividends has declined. For example, the PSEG Company in the United State, the payout ratio was about 67% in 2004 and fallen to 45% by 2007.Shows in the graph below: (http://www.pseg.com/index.jsp) This essay will mainly discuss the advantage and disadvantage about the dividend-paying. What are dividends? Dividends are payment made by corporation to the shareholders. Dividends come from the profit earned by company. There are two ways where company spends the surplus of profit, one is to reinvest to the business and the other is to pay back to the shareholders as dividends. The companies who pay dividends are usually taking no benefit if the reinvest the surplus profit back into the business, under this condition dividends are chosen to pay to th e shareholders, which is call payout. The forms of dividends are variable. The most common one will be the made by cash, which is the most common method of sharing corporate profits with the shareholders of the company. The second one is the stock dividends that is paid in form of additional share and it is counted by proportion, for example, if the shareholder owns 100 shares of the stock with 5% stock dividends, the shareholder can gain 5 more shares. Others like property dividends are taken as dividends payout as well. Advantage of dividend payout policy There is certain amount of people of the rightist position state that company pays a high dividend payout is important for investors for the reasons that paying dividends can convince the shareholders about the companys financial well-being. The higher rate of dividends payout shows better the company operating as well as larger number of profit, which might attracts the investors. Dividends are also attractive for the investors who want to get the stable current income easily. à ¢Ã¢â€š ¬Ã…“There is also a natural clientele of investors, such as the elderly, who looking to their stock portfolios for a steady source of cash to live onà ¢Ã¢â€š ¬Ã‚  (P456, Richard, 2008). In principle, the shareholders could sell a part of the shares to gain money even if the company does not pay dividends, but it is more convenience for the investors to get the money if companies pay the dividends by checks. In this case, the payout policy of cash dividends will reduce the cost of transaction as well as the inconvenience for the shareholders selling the shares. In addition, the long-term stable dividends payouts could help the company less affected by the changes of the dividends. Those companies with long history of stable dividends will be less influenced if the dividends decrease, but will be positively affected when dividends payout increases or even dividends stay the same level. Furthermore, companies without a dividend history are generally viewed favorably when they declare new dividends. The dividends announcement has resulted in a 4% rise of the stock price according to the dividend initiations studied by Healy and Palepu (P448, Richard, 2008). Many companies have taken the dividends paid back to shareholders as payout policy. For example Microsoft, the largest software company in the entire world, has announced their first dividends payout in 2003. The amount of the money has been divided into two forms of dividends, one was one-time dividends and the other was stock dividends paid quarterly installments by a unit as per share. (P457, Richard, 2008). Disadvantage of dividend payout policy Firstly, the radical state that dividends payout can be heavier than capitals gain when taxation of dividends is larger than the capital gains. Under this condition, company should put the spare profit back into the business by repurchase shares. It makes sense for the reasons that the capital gains have a tax advantage. When companies use the money to repurchase the share, the income will be larger because with the lower rate of tax on capital earnings, comparing to dividends payouts to shareholders with higher rate of tax on dividends. In the banking industries, a part of banks have stopped paying dividends to shareholders in 2009, according to the Capital Report. In the meanwhile, there are 202 firms have cut their dividends and 74 of which paid none at all (Web1). Secondly, the level of dividends payout can reflect the information about the confidence of the management from the company in the future, which will have an influence to the stock price. Generally, companies that pay dividends are sending a message to the market that their earnings are real which will result in the investors comfort about their investment. On the other hand, once the companies decide to cut the dividend it is also sending the information that they cannot maintain the dividends. However, the company might be able to cheat on their operation by overstating the earning to attract investors, but it is risky in the long term because the actual condition of the company will not have sufficient money to pay the dividends. The consequence will be costly if the companies choose a high dividend without getting enough profit. Most managers will not change the dividends without consideration about the operation of company, but they will increase the dividends only if they are c onfident it can be maintained. Thirdly, the consideration of a dividend policy might be irrelevant because investors have the ability to create their own dividends. It means that investors can be able to make their own à ¢Ã¢â€š ¬Ã‹Å"dividendà ¢Ã¢â€š ¬Ã¢â€ž ¢ by adjust the investment into different areas. For example, the investors who prefer a stable income are more likely to put their money into the bonds with the stable interest rates. In the case, the stock with dividends pay back will lose the advantage because of the flexible value. Investors who have invested to the bonds will not pay attention to the dividend policy of a particular company. Conclusion: Taking the dividend payout policy can attract certain amount of investors, and it is convenience for those investors who require stable and simple income. But dividends sometimes have tax disadvantage if the tax rate of dividend is higher than capital gains. And dividends are usually more flexible, comparing to the interest rates of bonds. It is important for a company to think whether to take the dividend payout policy by considering the assets, earnings, investments opportunities, market value and other factors about the company.

Prostitution in the Philippines

Prostitution and Venereal disease Prostitution: ?Prostitution is the act or practice of providing sexual services to another person in return for payment. Venereal disease: ? A disease that is contracted and transmitted by sexual contact, caused by microorganisms that survive on the skin or mucus membranes, or that are transmitted via semen, vaginal secretions, or blood during intercourse. Because the genital areas provide a moist, warm environment that is especially conducive to the proliferation of bacteria, viruses, and yeasts, a great many diseases can be transmitted this way. Type of STD Chlamydia: ?is a bacterial infection caused by pathogen (germ) Chlamydia trachomatis that usually infects the genitals of both men and women, but can also infect the throat, rectum and eyes. CHANCROID (SHANG-kroid); ? A bacterial infection that results in sores on the mouth, throat, lips, anus, tongue, vagina, or penis. CRABS (Pubic Lice): ?Tiny insects that live off human blood. Although they're often found around the genitals, they can live in any part of the body with hair. Gonorrhea: ?is a highly contagious sexually transmitted STD bacterial infection, sometimes referred to as the clap. The nickname of the clap refers to a treatment that used to clear the blockage in the urethra from gonorrhea pus, where the penis would be ‘clapped' on both sides simultaneously. HEPATITIS: ?There are five types of hepatitis — A through E — all of which cause inflammation of the liver. Type D affects only those who also have hepatitis B, and hepatitis E is extremely rare in the United States. HERPES (Herpes Simplex) ?Two types of a viral infection characterized by periodic outbreaks of painful sores. Stress, sunburn, and certain foods are the primary causes of a herpes outbreak. AIDS: ?is the acronym for the Human Immunodeficiency Virus, a virus that attacks the body's immune system, leading to full-blown AIDS (Acquired Immunodeficiency Syndrome). AIDS is devastating because it leaves the body susceptible to life-threatening infections and certain kinds of cancers. HPV / Genital Warts: ? Human Papilloma Virus (HPV) – a group of more than 70 viruses, some of which can lead to cervical cancer. Several strains of HPV cause external genital warts. SCABIES (SKAY-beez): ? A mite that burrows under the skin and lays eggs. SYPHILIS (SIFF-i-lis): ? A bacterial infection caused by an organism called a spirochete. Trichomoniasis: ?is a common sexually transmitted disease (STD) that affects both men and women. Trichomoniasis is caused by a protozoan parasite called Trichomonas vaginalisand is a cause of vaginal infections in women and urethral infections in men. Trichomoniasis is an STD that affects approximately 5 million people in the US every year. Trichomoniasis is one of the most common, curable causes of vaginal infections in women. By: Bobby P. Galleros

Who Fired at Lexington and Concord

Who Fired At Lexington? Who fired first at Lexington? This question seems to remain a mystery until now, but after much research, and answer has been decided. After scouring through many affidavits, maps, paintings, and such, I have learned that the most logical answer is that the King’s troops, or the British, were the ones who opened fire unto the colonial troops. There is credible testimony as well as a piece of art that leads to this conclusion. To begin with, there are two witnesses to the Battle at Lexington and Concord that openly admit to the British being the ones to first open fire.John Parker, the commander of the militia in Lexington, accounts that upon hearing that the British troops were approaching he gave orders to his men to â€Å"disperse and not to fire†. He then also recalls that his men were rushed by the British troops who opened fire and killed eight of their party without receiving any provoking from the militia in Lexington. Another man, Simon W inship gives account of his experience on the night of the Battle at Lexington and Concord.He states that he was riding his horse on the public road in Lexington, unarmed, when he was approached by the British troops and ordered to dismount his horse. When he asked why, he was removed from his horse by force from the British commanders. The commanding men ordered Winship to march with the troops. He refused, but somehow ended up marching with them for half of a quarter of a mile. The troops were told to halt, prime and load their weapons. The troops then marched on until they came into contact with Captain Parker’s militia.He then recounts that an officer at the head of the said British troops, â€Å"flourished his sword, and with a loud voice, giving the word fire, fire, which was instantly followed by a discharge of arms from said troops†. Winship accounts that he is positive that there was no discharge of arms from either side until the word fire was given by the sa id officer. A painting also gave credible representation of the events that occurred that night. The painting clearly displays the King’s regiment, marching into the space that was occupied by the colonists.The Colonial troops, dispersed and held their ground without provoking the red coats to attack. The commander of the British troops, is shown atop his horse waving his sword in the air as to commence the attack on the Colonial troops. It is obvious as demonstrated by the evidence, that the King’s troops were the offending party which opened fire on the Colonial troops. Even though there was testimony accounting that the Colonial troops were the ones to open fire, they were discounted as credible due to their biased position.

Essay on Great Achievements of Women of the Wild West

Have you ever wondered where we would be without the women of the Wild West? The most obvious we would be extinct, because there would be no reproduction of offspring. Women were needed for this reason, but there was so many more contributions that they made. Women were important in founding this great land. The women traveled with their men in hopes of getting free land out west, but it was a different story when they arrived. The winters were bad, rain was often lacking, and therefore, the crops did not grow. As a result, food was not plentiful. Many of the settlers almost starved to death. Women had to provide and support their families by cooking, cleaning, planting food, making clothes, washing clothes, mending clothes and,†¦show more content†¦Not to mention, they had to make the clothes usually from spun material or if they were lucky enough to have a general store to by the fabric by the piece or yard. If new material was not available, they cut up whatever t hey had like old curtains, flour sacks, even the canvas from the buggy. Wash day was a very tedious task for the women of the Wild West. The women carried the water from the creek, heated the water, washed the clothes on a scrub board, hung the clothes to dry, and then took them down to return them to the house; this had to take almost the whole day. Therefore, the rest of their work accumulated until the next day. This is kind of like when you miss a day of work and you return often the work is waiting for you the next day; coworkers only do what is necessary for them to complete their tasks. Women should receive more recognition for killing game in the absence of their husband. When the husbands went on a long journey or even to the nearest town it could take days before their return. Women would go out into the wild and kill the meat for the family and then come inside and cook it for the family. 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