O'Reilly logo

Get Started in Shares by Glen Arnold

Stay ahead with the world's most comprehensive technology and business learning platform.

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, tutorials, and more.

Start Free Trial

No credit card required

How much is paid?

Companies can choose the level of the dividends they pay. They can pay more than the total of the year’s profits after tax if they want, so long as they have accumulated profits from previous years still within the company. Most companies, however, settle in a band of dividend payments which is around 40–60% of that year’s annual profits after tax.

Generally, directors bend over backwards to avoid sudden changes in dividends. There are two main reasons for this. First, some investors like to have a predictable income stream from their shares; there are ‘clients’ for steady dividend payers. The problem is that profits in many industries can be quite volatile. If the company stuck rigidly to, say, a 50% payout of after-tax profits ...

With Safari, you learn the way you learn best. Get unlimited access to videos, live online training, learning paths, books, interactive tutorials, and more.

Start Free Trial

No credit card required