Dividend Policy Essay Example | Topics and Well Written Essays - 500 words

Dividend insurance - Essay ExampleThe news report also cited a clause in the lawsuit, which states that Greenlight is voting AGAINST intention 2 in Apples proxy, which would eliminate preferred stock from Apples charter. The Proposal 2 bundles several proposals regarding how preferred stocks be issued at Apple. Apple responded that the charge is not appropriate, with Greenlight grossly misrepresenting data, which formed the basis for its own proposal.Based from the report, the dividend compensation appears to be a form of extra or special dividend, which is paid during a period of gamey earning (Chapter 18). The success of its products, notably the iPhone and the iPad, saw the meteoric rise of Apples stock price, peaking at close to $700 in September of 2012 (Molina). As a result, the company has a lot of hard currency on hand. Indeed, accord to Apple it is distributing $45 billion within the span of three years (Molina). However, unlike most dividends infra this category, Ap ple opted to follow quarterly honorariumments, which is the most common practice among companies (Chapter 18).The decision to pay shareholders with dividends was only introduced by and by Steve Jobs death, after Tim Cook assumed leadership. Apple has been notorious for its policy of holding out on its cash hoard (particularly during Jobs tenure), and refusing to pay dividends to its shareholders. This dividend policy is, of course, justified. Apple has been known to spend much of its cash on question and development. This can also be attributed to the fact that dividend reduces the value of the firm (Chapter 18). Also, dividends are considered to be irrelevant as a policy. The reason for this is that investors will not pay higher prices for firms with higher dividends because they do not penury it to convert shares to cash (Chapter 18). It was only last year that Apple changed its position when the company decided to pay