Introduction
A non-monetary policy is utilized by other financial authorities or a central bank when the traditional likewise policies are not satisfactory. The policies not involving such an approach include collateral adjustments, quantitative easing, negative interest rates, and forward policies. The non-cash dividends are seen by taxpayers as being distributed as assets rather than cash to shareholders. The subsidiary shares are given to shareholders as assets of which is a non-cash dividend (Kien and Chen, 2020, p. 240). A non-cash dividend policy is a form of dividend that is not a cash payment, but may issue new shares that replace cash payment with another value.
The Shareholders’ Needs and Expectations On Dividends
During the COVID-19 pandemics, shareholders’ aim at focusing on long-term gain as the pandemic has led to the drop in the value of most firms. The shareholders’ needs on dividends entail getting a dividend paid to the shareholders for the investment in exchange for equity (Sultana, 2021). With the anticipation of a rise in the company’s value, shareholders should remain optimistic and influence the firm’s value to rise and make gains as quickly as possible. The COVID-19 pandemic has made all shareholders anticipate getting long-term profit, which has led them to have a long-term perspective hence maintaining their investment over the long term.
The shareholders’ expectation on dividends is that they will receive a smaller financial return during this COVID-19 pandemic. The company policies currently focus on how the firm will be sustainable and promote long-term growth (Ireland and Levy, 2021). The strategic influence of many shareholders is on affecting the firm’s governance to achieve goals and individual objectives. The percentage of ownership of a business’s strategic decisions lies with the shareholders and during the COVID-19, which has led them to negotiate with the company on ways to increase their dividends. The shareholders expect a drop in dividends during the COVID-19 pandemic as the outbreak has caused a lowering in investment returns.
The stockholders’ need for dividends implies that all of them need to be aware of their investment and the risks associated with it. The beneficiaries ought to be aware that the minimization of risk is that the firm’s ability to reduce its loss should be addressed, for this will help ensure their expectations are met.
In a pandemic situation, non-cash payments may not only be relevant for the company, but also serve as a new, more valuable form of turnover. In a volatile economy that will likely force many companies to survive in a post-pandemic world, there is no guarantee that monetary policy will be reliable. Purpose and skills seem to be more important in today’s business, thus alternative types of payments such as insurance programs or refresher courses are equally valuable commodities.
The Effects of COVID-19 Pandemic on Profitability/Viability
The impact of the COVID-19 pandemic on companies is the changes in commodity prices, value chains, buying patterns, and demand due to emerging market forces that cause the increase in production costs (Vest II, 2021, p. 20). The rise in adjusting prices during the COVID-19 pandemic has caused the prices to be adjusted, leading to the inflationary environment that has increasingly caused the alignment of the prices and margin position of industrial goods (Cieslak and Schrimpf, 2019, p. 296). The changes in price and the overestimation of production costs have led to the price increase leading to leadership incentives and market dynamics which then caused financial loss to companies making the business not viable.
Conclusion
The implementation of non-monetary policies is proven to be useful as governments were able to overcome the financial recession. The shareholders’ expectations rely on dividends, in case they own a share of a private company or possess a percentage of its outcome. They share a lot of the same objectives as people holding stock in public corporations, the main among these being the achievement of a profitable return on their financial investment. In a destabilized pandemic situation, however, non-monetary methods of exchange payments can be a rather significant type of financial policy that is only gaining relevance.
Reference List
Cieslak, A. and Schrimpf, A., 2019. Non-monetary news in central bank communication. Journal of International Economics, 118, pp. 293-315.
Ireland, P. N., & Levy, M. D. (2021). “Substantial Progress,” Transitory vs Persistent, and the Appropriate Calibration of Monetary Policy.
Kien, D.T. and Chen, Y.P., 2020. Ownership Structure Impact on Dividend Policy of Listed Companies on Vietnamese Securities Market. Journal of Mathematical Finance, 10(2), pp. 223-241.
Sultana, J., 2021. Impact of Dividend Policy on Share Price Volatility: A Comparative Study of the Manufacturing Companies Listed in Dhaka Stock Exchange (Doctoral dissertation, The University of Texas at El Paso).
Vest II, R.P., 2021. Non-monetary Economies: A Study on Different Governing Principles.