Temettu

Temettu is a Turkish word that generally translates to "dividend" or "profit sharing." It refers to a payment made by a company to its shareholders out of its profits. The concept is directly related to the ownership of shares in a corporation and the right to a portion of the company's earnings.

In Turkish commercial law, temettu is a key concept related to corporate finance and shareholder rights. The amount and timing of temettu payments are typically determined by the company's board of directors and are subject to legal regulations outlined in the Turkish Commercial Code (Türk Ticaret Kanunu). Factors influencing temettu decisions include the company's profitability, its cash flow, investment plans, and legal requirements regarding reserve funds.

Temettu can be distributed in various forms, most commonly as cash payments. However, it may also take the form of stock dividends (bonus shares) or other assets. The distribution of temettu is usually based on the number of shares held by each shareholder.

The declaration and payment of temettu can have a significant impact on the stock market. Companies that regularly pay dividends are often seen as more stable and financially sound, which can attract investors. Conversely, the decision to withhold or reduce temettu payments can sometimes negatively impact a company's stock price, although this is often context-dependent and related to why the dividend is being withheld.

The term is widely used in Turkish financial news, business reports, and legal documents related to corporations operating in Turkey. It is a fundamental concept for understanding shareholder returns and corporate governance within the Turkish economic environment.