Chapter 9 · Day 9 — Dividend, debt and liquidity
Dividends and whether they can last
Cash dividend, bonus share and rights issue are three different events. Only one of them puts money in your hand.
9 of 30 · 11 min
Nepali companies distribute in ways that are easy to confuse, and the confusion is expensive.
| Action | What you receive | Effect on your wealth |
|---|---|---|
| Cash dividend (नगद लाभांश) | Cash, taxed at source | Real cash return |
| Bonus share (बोनस शेयर) | More shares, same ownership % | **None by itself** — the price adjusts |
| Rights share (हकप्रद) | The right to buy more, at a set price | None — you pay for what you get |
The ratios
- Dividend yield = DPS ÷ Market price × 100
- Payout ratio = DPS ÷ EPS × 100
- Retention ratio = 1 − Payout ratio
With DPS Rs 6.00 and EPS Rs 11.50: payout = 52%, retention 48%. Roughly half the earnings are returned and half reinvested.
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