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Assessing Dividend Policy

Revisit the company you chose for your Week 6 Final Project. Using the annual report and other sources such as a 10k or 10q’s, discuss the dividend policy of your company.

Answer the following questions as part of your response:

How would you describe your chosen company’s dividend policy?
Why do you believe this company chose the dividend policy they have in place?
Do you agree or disagree that they have selected the best dividend policy for the company?
How might this dividend policy function in both perfect and imperfect capital markets?
Calculate the dividend rate over the past 5 years. Define why you believe that it has or has not changed over the last 5 years.

Support your position with evidence from the text or external sources.
Your post should be XXXXXXXXXXwords in length.

Aarti J · Accepted Answer

Discussion Post
Apple started to pay the dividend after 17 years in the year 2012and since then the dividends of the company has increased. The company has a higher dividend pay-out ratio as the revenues and the income of the company has grown over the years. The company’s dividend policy revolves around the generated revenues of the company and has been constant to improve on it and increase it. The company’s dividend yield is 1.6% and the payout ratio of the company is 26% in the last 12 months. 
Apple have a strong culture and consistent returns which ensures that the dividend policy of the company are strong and the growth of the dividend attracts the investors and give them the best returns. With the expansion of the company, the company has benchmarked its ratio against its earnings and the dividend per share of the company is also increasing. I think, Apple has been successful in creating a sound balance between the growth of the company and the increased dividends which has made the investors happy.
The dividend policy is irrelevant to the stakeholders when considering the perfect capital market. The firm itself is valuable whether it pays all its earnings as dividends or retains all its cash flows. The wealth of the stakeholders is not affected with the dividend policy.
The dividend paid over last five years includes:
	Year
	2018
	2017
	2016
	2015
	2014
	Cash dividends
	2.72
	2.40
	2.18
	1.98
	1.82
 
So, the growth rate of the dividends over past 5 years is: 49.45%, so the dividends per share over last 5 years has grown by 49.45%, which is quite high, and the five year growth rate is 10.50%
References:

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