Ad Free CAclubindia and Daily Updates on your Mobile. Subscribe Now!

Interim dividend

CHAITRI SUDHAKARBHAI KHAROD (ARTICLE) (752 Points)

07 August 2020

what is the logic behind declaration of interim dividend? ?

Reply
Follow
Share

6 Replies

YASASWI GOMES (49 Points)
Replied 08 August 2020

It is to keep the shareholders safe and to thank them for their support because one of the dividend policies- clientele effect- ensures prompt dividend payment will help the investors to meet their tax obligations/planning.

Upgrade to CAclubindia Pro. Subscribe Now!

CHAITRI SUDHAKARBHAI KHAROD (ARTICLE) (752 Points)
Replied 08 August 2020

Ok....then on the other side, share holders can know about solvency of company that company can declare interim dividend that means we can obtain maximum benefit by investing in this company....and company which can declare interim dividend will be enough capable for payment of final dividend also....is it correct? ?

YASASWI GOMES (49 Points)
Replied 08 August 2020

Yeah, some companies publish in the financial statements, that they have paid dividends even during tough times to portray their financial strategy to nurture SWM philosophy.

CHAITRI SUDHAKARBHAI KHAROD (ARTICLE) (752 Points)
Replied 08 August 2020

Ok....now everything is clear...thank you so much ma'am

yasaswi gomes (My grammar is 💯 good I) (7290 Points)
Replied 09 August 2020

It’s not a problem wlc. I didn’t prove it mathematically yet, but market cap with OPTIMAL share price, maximises SWM. Paying dividends is discretionary company policy.