Dividends

Dividends are profits distributed to shareholders of the enterprise when activities of business have achieved good results after a business cycle (usually one year) (Arnold, G. 2008).
When business activities make profits which must pay corporate income tax and the interest remaining (after tax) is called "profit can be distributed to shareholders." However, most of businesses never split all of divisible profits, which they must retain a part relatively large to continue invest in production, sales and new projects, serving the next business cycle. For this reason, the shareholders meeting held in last business cycle. Directors may be submitted plans to use a certain percentage of profit after tax to the Board of shareholders.to dividends to shareholders
If this plan of dividing the vote to pass, the dividend policy of that year was officially confirmed and takes effect. Some companies also have dividend policy for a period of many years, but also the policy itself is implemented only in some certain conditions.
Because there may exist a number of different stocks in the same enterprise capital structure, there may be some kind of dividend with different levels of priority and conditions for payment of time and different masses. Normally, because there may exist a number of different stocks in the same enterprise capital structure, there may be some kind of dividend with different levels of priority and conditions for payment of time and different masses. (Czinkota, M.R., Ronkainen, I.A. & Moffet, M., 2008)
Reference
Arnold, G. (2008) Corporate Financial Management. Financial Times Prentice Hall Publishing
Czinkota, M.R., Ronkainen, I.A. & Moffet, M. (2008) International Business: 8th Edition, Thomson