Dividend Policy
Abstract
‘Shareholders’ wealth maximisation’ refers to exceeding industry benchmarks in order to maximise returns to shareholders. Both capital yield and dividend yield are included in ‘returns’. When a business consistently distributes dividends to shareholders in line with its growing surplus, dividend yield results. A business performing well and generating market returns to shareholders reflects a capital yield. The management decides on dividend payments, but they have no control over the company's performance in the market. Therefore, a suitable dividend policy is crucial for optimising the wealth of shareholders.
Fields of Study & Subjects
Corporate Finance and Governance
Financial Analysis and Corporate Governance
Financial Reporting and Valuation Research
Publication details
- Journal / source
- Routledge eBooks
- Pages
- 111–124
- Publication date
- 26 February 2026
- Language
- EN
- Document type
- Book chapter