Dividends are cash payments, shares of stocks or other types of payments that are issued by a company. It is shareholder returns issued from after-tax profits of company, and the size of dividend is depend on the dividend yield of each shareholder and operating performance of company. Thus, these dividends are portions of the companys retained earnings that are given to shareholders. This money that is distributed to shareholders is money that the company has earned from their daily operations, so dividend could be understood as return on investment. Certainly, this money can also be reinvested into the company yet many companies choose to give it to its shareholders as dividends.

However, as everyone could see that some of companies are issuing dividends while others are not. Facts proved that it is not a key point to win the market, so why do companies pay them or not pay dividends? Public listed companies are operating in regulated space, so they have to be transparent to their shareholders about their organizational and financial structures. They can pay or not pay dividends but they must have reason for that. In general, the public listed companies issuing dividend based on four main reasons: investor preference, reducing agency costs, transporting future information and encouraging future share price. Also, the companies want to issue dividends must have enough undistributed profit from retained earnings and cash. If a company is growing slowly, then their stocks will not grow as much either; therefore the company must pay its shareholders dividends if they want them to continue with them.

Do investors want dividend?

Tax bracket is the rate at which an individual is taxed. These brackets are set based on income.

Based on two parts list below to answer this question:

-High tax bracket investors -Low tax bracket investors / investors that consider dividend as income source