Meaning & use
dividend policy
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Meanings
nouncountable or uncountablebusinessfinance
A company's stated approach to deciding how much profit to pay to shareholders as dividends and how much to keep.
Grammar: Used with 'a' or 'the' when talking about one company's approach; often uncountable in general discussion.
Patterns
- a company's dividend policy
- set a dividend policy
- change the dividend policy
The board changed its dividend policy to pay out more cash each quarter.
Analysts praised the firm's stable dividend policy during the downturn.
A conservative dividend policy means more profit is kept for research.
noununcountablefinance
The branch of corporate finance that studies when and why companies pay dividends.
Grammar: No plural; used for the academic subject or theory.
Patterns
- a course in dividend policy
- the theory of dividend policy
She wrote her thesis on dividend policy and investor behavior.
The textbook devotes a chapter to dividend policy.
Word forms
| plural | dividend policies |
|---|
Common combinations
- stable dividend policy
- Income funds prefer companies with a stable dividend policy.
- adopt a dividend policy
- The new CEO adopted a dividend policy that rewards long-term holders.
- dividend policy decision
- The dividend policy decision was postponed until the next meeting.
- affect dividend policy
- Higher taxes can affect dividend policy.
Synonyms and how they differ
- payout policy
- A broader term that also covers share buybacks, not just cash dividends.
Word family
- dividend noun
- The payment itself.
- dividend yield noun
- The annual dividend divided by the share price.
Commonly confused: dividend policy or monetary policy?
dividend policy vs monetary policy
Monetary policy is set by a central bank about interest rates and money supply; dividend policy is set by a company about profit payouts.
Practice
Which sentence uses 'dividend policy' correctly?
Choose one answer.
Dividend policy belongs to a company and concerns profit paid to shareholders. Interest rates belong to monetary policy, personal saving is not a dividend policy, and import rules are trade policy.
Make it your own
Write a sentence using “dividend policy”, then check it and compare it with the examples above.