how does a company determine how many dividends each shareholder should get?

Question

For example, if I invest 4 dollars in a company, how do they determine that I should get 4.75 instead of 8 dollars?

Answer 1

it depends on their dividend policy. Most companies have a stable or steady dividend policy where they aim to maintain a fixed yield on the share.

So if your share price is $1 and they say 10%dividen yield you will get a 10cent dividend.

In terms of making the decision, it is very complex and requires sound knowledge of the business's financial position currently and a lot of forecasting. Also in many countries dividends can only be paid out of profits. So if they make a loss, you aint getting any dividends as a shareholder unfortunately. Thyell aim to pay you th steady dividend and any excess funds will be used to invest or they may just retain the funds for later use. Just depends on the management structure and policy

Answer 2

Dividends go with the stock you own. The company will say something like you get a 50 cent (or whatever) dividend per share of stock so if you own 100 shares you get 100*.50 = 50 dollars in dividends. The dividend goes to whoever owns the stock on a specified day called the ex-dividend date

Answer 3

When a company declares a dividend, it is declared per share. So the amount of dividend you receive is determined by how many shares you hold. For example, if a company declared a dividend of $0.30 per share and you own 1,000 shares, you receive a $300 dividend check.

Answer 4

Companies pay dividends on a per share basis. If you own 4 shares and they declare a dividend of $1 per share you get $4. If you own a million shares you get a million dollars.

Preferred stock can get a little more complex but it is still on a per share basis.

Answer 5

They train some monkeys to throw darts.