Dividend Policy Of Russian And Foreign Companies: Comparative Analysis

Abstract

Dividend policy is an integral part of the modern company’s activities with share capital. The right dividend policy allows the company to maintain stable growth and development, as well as attract new shareholders. Shareholders are interested in a stable profit in the future. They are interested not only in the growth of the value of the company they own shares, but also regular in receiving the dividend payments. Russian companies use the experience of foreign companies in developing their own dividend policy. At the same time Russian and foreign companies differ in their dividend policy. A comparative analysis of the Russian and foreign experience of dividend policy suggests a more complex correlation between foreign companies and their shareholders. Dividend policy of Russian companies is much easier. It can be explained by a different degree of development of market relations in the country. The economic culture of investment in securities in Russia is less developed than in USA and Europe. This is due to the period of interruption of market relations in Russia. The dividend policy differences can be explained by countrys legislative framework and the return on equity. Loan capital is cheaper for foreign companies than for Russian companies. As a result, foreign companies use the policy of buying back shares very often. Russian companies usually use a policy of dividend payment in the form of cash.