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A Company's Dividend Policy

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Question: Present your own company's dividend policy or research a publicly-held company's dividend policy and summarize your findings. Include whether the company has changed its policy in the last few years. Give your opinion as to why management decided on its particular policy, including market and financial considerations that you believe affected the policy.

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In April 2009, Wells Fargo lowered its quarterly dividend payment from $0.34/share to $0.05/share. Wells Fargo followed suite of other financial companies to lower its dividend payment such as: JPMorgan Chase ($0.38/share to $0.05/share in March 2009), Bank of America ($0.32/share to $0.01/share in January 2009) and Citigroup ($0.16/share to $0.01/share in January 2009). Wells Fargo was believed to be one of the strongest companies in the banking sector. However, analysts and investors were concerned about Wells Fargo's capital ...

Solution Summary

A company's dividend policy is examined. Particular policy for market and financial considerations are provided.