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4 Returns Share Repurchase 1

 4 Returns Share Repurchase 1 Composition

DIVIDENDS &

STOCK REPURCHASE - I actually

Dr . Kulbir Singh

ACF Term 3 2013-14

IMT Nagpur

• Shareholders like it.

• Bondholders hate this.

• Managers consider it obvious.

• Economic economists think it is

puzzling.

• What is it?

• Dividends; what else?!

ADVANTAGES

Dividend has been defined u. s. Sec 2 (14A) of the Firms Act, 1956 Dividend payment by American indian Companies are regulated by Sec 205 of Companies Take action, 1956 Dividend is circulation of divisible or distributable profits of any company among the holders of its shares.

Paid by company to its investors on the basis of volume of shares organised by all of them and the privileges attached to the various class of shares.

Dividend includes any kind of interim gross

Dividend announced at any time between two AGM

Paid till profits of your period prior to accounts for that period had been prepared Could be paid in the event that authorized simply by AoA

Reported by Table of Directors in AGM

Declaration of dividend is generally one of the items of the Agenda of every annual general getting together with Approval of shareholders needed in India and most of Europe and China, although not in some countries like the UNITED STATES.

INTRODUCTION

Dividend is paid by a firm to its shareholders over a particular date (book seal date) both out of profits or out of reserves.

Returns are paid after featuring fro Downgrading (Sec 205(1) to the level specified in Sec three hundred and fifty of the Corporations Act) and

After transferring to the reserves (Sec 205(A)) of the organization at least 10% of its income that yr.

A company might, if thus authorized simply by its Articles of affiliation, pay dividends equal in porportion to the sum paid-up to each share.

Financing Act, 1997 has introduced, w. e. farrenheit 01st June, 1997, duty on gross – interim or otherwise, designated as Duty on Allocated Profit.

Present rate of tax 15% plus overcharge @ five per cent plus education cess @ 2% of amount so declared, distributed or paid

Dividend duty is different by short term capital gains which is 15. 45% if STT of 0. 10% Long Term Capital Benefits tax is nil, so long as the buyer has paid STT

ADVANTAGES

Taken jointly, cash returns and share repurchased during any given year make up a business payout intended for the year.

A company's pay out policy is definitely the set of rules guiding pay-out odds. Dividends matter analysts and managers, because they affect purchase returns and financial percentages.

Dividends also provide important information regarding future firm performance and future expenditure returns.

ADVANTAGES

http://www.google.com/finance?q=NSE%3AHCLTECH&ei=1OX1UpiAJ42ykgWU4QE

RETURNS: FORMS

Companies can pay returns in a number of techniques:

Cash gross

Regular

Extra/special/irregular

Liquidating

Share dividend/Bonus Shares

Stock divides

Stock repurchase

We can explore several forms of returns and their impact on both the investors and the giving company

FREQUENT CASH DIVIDENDS

Many companies want to distribute cash on a regular basis. Customary frequency may vary among markets

Geographic Differences in Frequency of Payment of money Dividends Marketplace

Most Common Regularity

United States and Canada

Quarterly

Europe

Semiannually

Japan

Semiannually

China

Annually

India

Annually

REGULAR MONEY DIVIDENDS…..

Gross paying firms strive to preserve or enhance dividends Constant dividends on the long time period is viewed as proof of profitability

Constant increase in payouts over a period indicate to buyers that their very own shares are of high expenditure value

Actually during transitory problems, businesses strive never to reduce dividends

Regular payouts, esp. increasing regular payouts also transmission to investors their business is growing and can share earnings

Management may use dividend announcements to speak confidence within their company's future

An increase in standard dividend (esp. if it is unexpected) often features appositive impact on share value

DIVIDEND REINVESTMENT PLAN...

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