The requirement of profitability of shareholders: The choice of shareholders to leave some reserves therefore equates to a new investment for which it has a performance expectation. The company "creating shareholder value" if it reinvests profits to a rate higher than the weighted average cost of capital (WACC).
Conversely, the "Moneybox" company accumulates reserves year after year contribute to increasing excess cash placed in money market rates, currently a zero rate or even negative. The return on equity ratio was therefore progressively closer to the money market rate. This may be the case of the leader shareholder setting that emphasizes the sustainability of its business in return on equity.
Conversely, the "Moneybox" company accumulates reserves year after year contribute to increasing excess cash placed in money market rates, currently a zero rate or even negative. The return on equity ratio was therefore progressively closer to the money market rate. This may be the case of the leader shareholder setting that emphasizes the sustainability of its business in return on equity.
The requirement for shareholder dividends compared to a full self-financing (as far as this is feasible!) Has a virtuous effect on the company's management. It forces the manager to invest in projects whose profitability provides ability to repay loans to convince lenders and bankers attracted new investors.
Other ways to make money for shareholders.
Different techniques can make money only to shareholders who so wish:
• The listed groups may repurchase shares over the water in the limit of 10% of their shares. Under IFRS, these actions are negative for the purchase price in equity;
• A company may redeem the shares of a shareholder wishing to opt for canceling, reducing the capital. It is a decision of the extraordinary general meeting (EGM) taken by a majority of 2/3, reducing the capital modifying effect in the statutes.
• Some listed companies offer their shareholders to pay them a share dividend. The number of shares offered in substitution of paid cash dividend is defined relative to the prevailing action reduced by a maximum discount of 10% on average during the last 2. The shareholders thus have the choice of receiving their dividend in shares or in cash.
The dividend payment date
The date of dividend payment date is decided by the AGM traditionally payment is annual. However, more and more groups fractionate payment by installments. For example, a group decided in July 2015 an interim dividend paid in December 2015, under the result of the same year.