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Define dividend decision

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Define dividend decision

Posted by Raunak Shaw 6 years, 7 months ago

CBSE > Class 12 > Business Studies

1 answers

Sia ? 6 years, 7 months ago

Dividend Decision: Dividend decision involves deciding the amount of profits to be distributed among the shareholders and amount of profits to be retained in the business to meet investment requirements. While diividend constitutes current income, its re-investment as retained earnings helps in increasing future earning capacity of the firm. The decision regarding dividend should be taken keeping in mind the overall objective of maximising shareholder's wealth.

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