What impact do share price have on issue of dividend ? And what was the reason behind it?

Question

Accepted Answer

The share price has an impact on the issue of dividends as it affects the dividend yield and the amount of cash paid out to shareholders.

Share price affects the dividend yield, which is calculated by dividing the annual dividend per share by the share price.
A higher share price reduces the dividend yield, making the stock less attractive to income-seeking investors.
Share price also affects the amount of cash paid out as dividends. A higher share price may result in a lower dividend payout ratio.
Companies may adjust their dividend policies based on share price to maintain a desired dividend yield or payout ratio.
For example, if a company's share price increases significantly, it may choose to increase its dividend to maintain a consistent yield.

Accepted Answer

On issue of dividend share price declines because as profits will be distributed to shareholders the value of the company will decreases and eventually the share price go down

What impact do share price have on issue of dividend ? And what was the reason behind it?

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