Dividend and Payout Policies of Apple Inc

Running head: DIVIDEND AND PAYOUT POLICIES OF APPLE INC
Dividend and Payout Policies of Apple Inc
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1DISCUSSION ON DIVIDEND PAYOUT RATIO OF APPLE
Executive Summary:
This report is prepared to analyze and understand the dividend policies and the payout
policies for the last couple of years. Dividend is the return paid to the equity shareholders,
which is a part of the residual profit. Sometimes business organizations retain certain amount
of residual income for investing into the business for growing up the business. In this report,
the dividend policies and the payout policies of the Apple Inc, have been analyzed and their
strategies have been analyzed to understand their retention policies and investment policies.

2DISCUSSION ON DIVIDEND PAYOUT RATIO OF APPLE
Table of Contents
Introduction:...................................................................................................................3
Overview of Payout Policy:...........................................................................................3
Dividend policy at Apple:..............................................................................................4
Apple’s Policy and informational content:................................................................4
Risk and outlook for the company:............................................................................6
Dividend Vs Repurchases:.............................................................................................7
Share Valuation:...........................................................................................................11
Conclusions and recommendations:.............................................................................12
References and bibliography:.......................................................................................12

3DISCUSSION ON DIVIDEND PAYOUT RATIO OF APPLE
Introduction:
Shareholders are the owners of an organization. They invest their funds into
the business and in return, they expect some share of profit from the business. From the
profit, the interest or the claims of the fixed claimants are paid first and a part of the
remaining income is paid to the shareholders. This is known as the dividend. Therefore, the
part of the residual income, which is paid to the shareholders as return, is known as the
dividend. In this report, the dividend payout policies of the Apple Inc have been analyzed and
their strategies of investing the profit into the business again and growing up the business
have been analyzed based on the historical financial data of the Apple Inc (Andriosopoulos
and Hoque 2013).
Overview of Payout Policy:
Dividend payout is a vital financial management decision that the management of an
organization need to set for better utilization of their capital and reduction of the overall cost
of capital. If dividend is paid more, then the overall cost of capital increases and the retention
decreases (Andriosopoulos and Hoque 2013). On the other hand, if less amount of dividend is
paid, more share of profit is retained in the business and the overall cost of capital becomes
minimum. Dividend policy is nothing but all those payout and retention decisions and the
tradeoff between the debt and capital in the total capital structure of the company. In the
following parts of this report such dividend policies of the Apple inc and its risk exposures
have been analyzed with the help of historical data (Andriosopoulos and Hoque 2013).