Understanding Gonzo Growth Corporation's Dividend Plan

What is Gonzo Growth Corporation's current dividend policy?

The Gonzo Growth Corporation currently does not pay dividends to its shareholders. This means that the company retains all of its earnings and does not distribute any profits to its investors.

Explanation of Gonzo Growth Corporation's Dividend Plan:

1. Current Dividend Policy: Gonzo Growth Corporation has never paid a dividend and will not do so in the next year. This indicates that the company follows a non-dividend policy at present.

2. Future Dividend Plans: In two years, the company intends to change its policy and will start paying dividends. The dividend payment will be equal to 40% of its earnings at that time.

3. Definition of Dividend: A dividend is a portion of a company's profits paid to its shareholders. In this case, 40% of the company's earnings will be allocated towards dividends.

4. Calculation of Dividend: Earnings refer to the company's profits, which are determined by deducting expenses from revenues. The actual amount of the dividend will depend on the company's earnings in two years.

Therefore, even though Gonzo Growth Corporation does not currently pay dividends, it plans to initiate dividend payments in two years, with the dividend amount set at 40% of its future earnings.