1.   Dividend payments reflect the division of earnings between payments to stockholders and reinvestment in the firm.

2.   Finally, there are some legal constraints on dividend payments.

3.   For these reasons, most finns strive to maintain a reasonably stable dividend payment from year to year.

4.   From an accounting point of view, dividend payment is a two-step process.

5.   Many companies parcel out portions of their profits to stockholders in the form of cash dividend payments.

6.   None the less, they hold on because they expect much bigger earnings in the future to eventually fuel dividend payments.

7.   In reality, they usually make two dividend payments per year, an interim and a final dividend.