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A company 's shareholders are the most important capital suppliers to the firm and financial decision making is aimed towards maximising their wealth. One of the important financial decisions made within a company is it dividend policy.
Dividend policy is the strategy is a strategy a company uses to transfer cash to its shareholders. It relate to the determination of how much and how frequently cash can be paid out of the profits of an entity as income for the shareholders
SIGNIFICANCE
Dividend policy is seen a signal from the company to the financial markets and shareholders. investors perceive announcements as signals of future prospects for the entity.
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