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BRILLIANT’S Dividend Decision 241

with unstable earning adopts dividend policy A{Zª½g ApñWa hmoVr h¡, H$s {S>{dS>oÝS> nm°{bgr CZ H$ån{Z`m|
different from those which have steady earn- H$s {S>{dS>oÝS> nm°{cgr go {^Þ hmoVr h¡ {OZH$s Am` pñWa
ings. Industries with stable income are in a hmoVr h¡Ÿ& pñWa Am` dmcr BÝS>ñQ´>r`m§ EH$ AZwHy$c {S>{dS>oÝS>
position to formulate consistent dividend
nm°{cgr à{Vnm{XV H$aZo H$s Xem _| hmoVr h¡Ÿ& gm_mÝ`V:,
policy. Generally speaking, large and mature
cmO© Ed§ _¡À`moa H$ån{Z`m± {S>{dS>oÝS> H$m ^wJVmZ C±Mr Xa go
companies, pay a reasonably good but not an
Z H$aVo hþE C{MV Xa go H$aVr h¡ EH$ H$ånZr Omo à{g{Õ
excessive rate of dividend. A company which
believes in publicity may follow a more liberal _| {dídmg aIVr h¡, dh EH$ Á`mXm {c~ac {S>{dS>oÝS>
dividend policy. nm°{cgr H$m nmcZ H$a gH$Vr h¡Ÿ&
2. Attitude of Management: The attitude 2. _¡ZoO_oÝQ> H$m ì`dhma: _¡ZoO_oÝQ> H$m ì`dhma
of management affects the dividend policy in {S>{dS>oÝS> nm°{cgr H$mo AÝ` àH$ma go à^m{dV H$aVm h¡Ÿ&
another way. Some organizations prefer to Hw$N> Am°J}ZmBOoeÝg H¡$e H$mo gwa{jV aIZm ng§X H$aVo
conserve cash. Such an approach may easily
h¢Ÿ& Bg àH$ma H$s AàmoM ^{dî` _| CZH$s \$ÊS> H$s
meet their future requirement of funds but it Amdí`H$Vm H$mo AmgmZr go nyam H$a gH$Vr h¡ naÝVw `h
deprives the stockholders of a legitimate re- ñQ>m°H$ hmoëS>g© H$mo CZHo$ BZdoñQ>_oÝQ> na C{MV [aQ>Z© go
turn on their investment. On the other hand,
d§{MV H$aVr h¡Ÿ& Xygar Amoa, Hw$N> {c~ac Am°J}ZmBOoeÝg
some liberal organizations feel that sharehold-
ers are entitled to an established rate of divi- `h _hgyg H$aVr h¡ {H$ O~ VH$ CZH$s \$m`ZopÝe`c
dend as long as their financial position is rea- nm°{OeZ n`m©á ê$n go AÀN>r ahoJr V~ VH$ eo`ahmoëS>g©
sonably sound. {S>{dS>oÝS> H$s EH$ pñWa Xa Ho$ {cE A{YH¥$V hm|JoŸ&
3. Investment Opportunities: Many com- 3. BZdoñQ>_oÝQ> Am°ßÀ`y©{ZQ>rO: H$B© H$ån{Z`m± Omo
panies retain the earnings to facilitate planned ßcmÝS> EŠgnmÝeZ H$mo AmJo ~‹T>mZo Ho$ {cE Am` H$mo gwa{jV
expansion, may feel that they may not be able aIVr h¡ do `h _hgyg H$a gH$Vr h¡ {H$ â`yMa EŠgnm°ÝeZ
to sell securities for raising necessary finance
_| Amdí`H$ \$m`ZoÝg àmá H$aZo Ho$ {cE do {gŠ`y[aQ>rO
for future expansion. They may adopt a policy H$mo goc Zht H$a nmEJrŸ& do A{Zª½g Ho$ A{YH$m§e {hñgo H$mo
for retaining larger portion of earnings.
gwa{jV aIZo Ho$ {cE EH$ nm°{cgr {ZYm©[aV H$a gH$Vo h¢Ÿ&
It is wise to adopt a conservative policy of `{X EŠgQ>Z©c \$m`ZopÝg¨J _| em{_c H¡${nQ>c H$s
dividend if the cost of capital involved in ex- H$m°ñQ>, BÝQ>aZcr OZaoQ>oS> \$ÊS²>g go Á`mXm hmo Vmo {S>{dS>oÝS>
ternal financing is greater than cost of inter- H$s EH$ H$ÝOd}{Q>d nm°{cgr {ZYm©[aV H$aZm {ddoH$nyU© hmoJmŸ&
nally generated funds. Similarly if a company
Cgr àH$ma, `{X H$ånZr Ho$ nmg BgHo$ \$ÊS²>g H$mo BZdoñQ>
has lucrative opportunities of investing its
H$aZo Ho$ cm^àX Adga h¡ Ed§ dh AnZr H¡${nQ>c H$s
funds and can earn a rate higher than its cost
of capital, it may adopt a conservative divi- H$m°ñQ> go CÀMV_ Xa go A{O©V H$a gH$Vr h¡ Vmo dh EH$
dend policy. H$ZOd}{Q>d {S>{dS>oÝS> nm°{cgr {ZYm©[aV H$a gH$Vr h¢Ÿ&
4. Regularity: A company may decide 4. {Z`{_VVm: EH$ H$ånZr CgH$s H$a§Q> A{Zª½g Ho$
about dividends on the basis of its current AmYma na {S>{dS>oÝS²>g H$m {ZU©` co gH$Vr h¡ Omo H$ånZr
earnings which may be the best index of what Ho$ {cE `h kmV H$aZo H$s ~oñQ> BÝS>oŠg h¡ {H$ dh {S>{dS>oÝS>
a company can pay. But there may be large H$m {H$VZm ^wJVmZ H$aoŸ& naÝVw Am` _| H$B© n[adV©Z hmo
variations in earnings and so the dividend may gH$Vo h¢ Am¡a Bg{cE {S>{dS>oÝS> ^r gmc Xa gmc n[ad{V©V
also vary from year to year. Some companies
consider regularity in payment of dividends hmo gH$Vm h¡Ÿ& Hw$N> H$ån{Z`m± {S>{dS>oÝS> Ho$ ^wJVmZ _|