Different policies on the payment of dividends

Assignment Help Financial Management

Reference no: EM13883377

Different businesses have very different policies on the payment of dividends and what that communicates to stockholders. Basically there are two ways to reward stockholders: 1) pay them via dividends and 2) pay them with capital appreciation of their stock. Explain why some firms would opt for one strategy yet other for the other approach. Provide examples of each.

Reference no: EM13883377

Questions Cloud

How has this model evolved and changed as the company : What do you believe is the operations strategy model developed by Crocs? How has this model evolved and changed as the company has grown

Stock valuation and required return : Stock Valuation and Required Return [LO1] Red, Inc., Yellow Corp., and Blue Company each will pay a dividend of $3.00 next year. The growth rate in dividends for all three companies is 6 percent. The required return for each company’s stock is 8 perc..

Company will maintain this dividend-current share price : Estes Park Corp. pays a constant $1.7 dividend on its stock. The company will maintain this dividend for the next 17 years and will then cease paying dividends forever. If the required return on this stock is 2.34 percent, what is the current share p..

Explain how budget planning is related risk management : Explain how budget planning is related risk management for the RFP

Different policies on the payment of dividends : Different businesses have very different policies on the payment of dividends and what that communicates to stockholders. Basically there are two ways to reward stockholders: 1) pay them via dividends and 2) pay them with capital appreciation of thei..

What amount should be used as the initial cash flow : Kelly's Corner Bakery purchased a lot in Oil City 6 years ago at a cost of $302,000. Today, that lot has a market value of $340,000. At the time of the purchase, the company spent $15,000 to level the lot and another $20,000 to install storm drains. ..

Bonds currently sell-yield to maturity : Crossfade Co. issued 16-year bonds two years ago at a coupon rate of 8.5 percent. The bonds make semiannual payments.

Transactions will arbitrageur undertake to arbitrage profits : An arbitrager at Deutsche Bank notices that the yield on Brazilian Real 6-month risk-free bills is 5.5% per annum and the yield on U.S. 6-month T-bills is 7% per annum. What transactions will the arbitrageur undertake to realize arbitrage profits in ..

What is your rationale for formulating this strategy : What would be a strategic goal you would propose for a nursing home that would enable it to be profitable? What is your rationale for formulating this strategy

User Account

All Pages