Question

What are some examples of a dividend is in a small firm vs a big firm? Thanks!

Answer 1

Dividend is a fixed percentage of which is paid by the company to the shareholders.it is a method of distributing the profit back to the shareholders as shareholders are the original owners of the company.

This could be attributed to the management policies of dividend distribution and it has nothing to do with the size of the company.

Smaller size form can also distribute dividend while a larger size firm may not opt to distribute dividend.

It can be reflected from recent dividend distribution trends of many of the companies which are small cap and listed on national stock exchange in India

Few of the companies are Avanti feeds, graphite India, rain industries.

Many small cap company have always been providing with dividend to various shareholders and it is a constant policy for them as they believe in returning the profits back to the shareholders as they are highly profitable and high growth companies.

There are many large cap companies also which refrain from paying out dividend because of various liquidity crunch and reinvestment issues.