Dividend Policy Strategy

Dividend policy strategy refers to how a company decides to distribute its profits to shareholders as dividends. This involves balancing between rewarding shareholders with regular cash payouts and reinvesting profits back into the business for growth. A company might adopt a stable dividend policy, paying a consistent amount, or a residual policy, paying dividends after funding investments. The chosen strategy reflects the company's financial health, growth opportunities, and the expectations of its investors, ultimately influencing its stock price and investor satisfaction.