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what exactly is a homemade dividend? Does this concept lessen the importance of dividend policy?

what exactly is a homemade dividend? Does this concept lessen the importance of dividend policy?

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Homemade dividend is a type of selfmade dividend when the company will not be declaring any kind of dividend then various individual will be selling their share in a certain proportion in respect to maintain their overall homemade dividend. Homemade dividend is a reflection of selfmade dividend which has been created out of selling of the shares of the company which are held by the investor.

For example, if the investor was used to receive $5 off dividend on each shares of Apple which was held in his portfolio then, he will be selling the similar proportion of shares of Apple in order to manage with dividend.

This concept will be lessening the impact of dividend because it is reflecting that investors can create the dividend irrespective of whether the company is declaring it or not It is hardly impacting his overall portfolio value

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