A dividend is a payment by your company to its shareholders to distribute a portion of its earnings as a return on their investment.
Why should I pay a dividend?
Dividends add to your company’s share price, to the value of the amount paid plus interest on past dividends. This total amount is known as your your company’s Shareholder Value (SHV) and is the main performance indicator in MikesBikes.
How do I pay a dividend?
Dividends become available from Year 4 of the MikesBikes Introduction Simulation.
You make your dividend decision under the Finance menu. Select Dividends from the left-menu then enter the amount you wish to pay per share:
How much of a dividend should I pay?
You should only pay a dividend once your company has maintained profitability for at least two years, and you have sufficient cash to make all of your desired decisions. At that point, a portion of excess cash can be used to pay a dividend.
How much to pay can be determined by:
- How much cash you have available (see Live Forecast at the top right of screen).
- How much you wish to risk paying a dividend if your forecasts for the year ahead don’t pan out.
- The maximum dividend limit.
Information to help you make your decision is at the right of the Dividend screen:
MikesBikes restricts the maximum size of your dividend payment to 50% of Retained Earnings. You will also not be allowed to issue a dividend if your company’s Share Price is below $5.