Alternative dividend policies, Financial Management

Alternative dividend policies, Financial Management

Assignment Help:

The managing directors of three profitable listed companies discussed their companies'' dividend policies at a business lunch.

Company A; has deliberately paid no dividends for the last five years.

Company B; always pays a dividend of 50% of earnings after taxation.

Company C; maintains a low but constant dividend per share (after adjusting for general price index), and offers regular scrip issues and shareholder concessions.

Each managing director is convinced that his company''s policy is maximizing shareholders wealth.

Required

What are the advantages and disadvantages of the alternative dividend policies of the three companies? Discuss the circumstances under which each managing director might be correct in his belief that his company''s dividend policy is maximizing shareholders wealth. State clearly any assumptions you make.

Related Discussions:- Alternative dividend policies

Objectives of cash management, Q. Objectives of Cash Management? (i) To...

Q. Objectives of Cash Management? (i) To sustain Optimum Cash Balance: - The major objective of cash management is to determine the optimum cash balance required in the busines

Credit analysis- account receivable management, Credit analysis Assessm...

Credit analysis Assessment of creditworthiness depends on the examination of information relating to the new customer. This information is frequently generated by a third party

Define the common pattern of cash flows, What is the common pattern of cash...

What is the common pattern of cash flows for a share of preferred stock? How does the market define the value of a share of preferred stock, specified these promised cash flows?

Tests in investments, Tests in Investments There are many rules that sp...

Tests in Investments There are many rules that specify how the past data of share prices can be used to obtain a clue regarding the future prices of shares. Such rules would be

Valuing an option-free bond, To value an option-free bond, we must de...

To value an option-free bond, we must determine the on-the-run yield curve for the particular issuer whose bond we have to value. This on-the-run yield curve used

Uses of index numbers, Uses of Index Numbers 1. Establishes trends ...

Uses of Index Numbers 1. Establishes trends Index numbers when analyzed reveal a general trend of the phenomenon under study. The available figures for inflation based

Evaluate alternative hedging strategies, Peak Inc. needs to order Canadian ...

Peak Inc. needs to order Canadian raw materials to use in its production process. The Canadian exporter typically invoices Peak in Canadian dollars. Assume that the current exchang

The visitors perceive to justify the renovation, Lincoln Park Zoo in Chicag...

Lincoln Park Zoo in Chicago is considering a renovation that will improve some physical facilities at a cost of $1,800,000. Addition of new species will cost another $310,000. Addi

Operating cycle, discuss the applicability of operating cycle to poultry bu...

discuss the applicability of operating cycle to poultry business(consider broilers)

Define the risk of cost of capital, Risk of cost of capital A straight...

Risk of cost of capital A straightforward assumption of traditional cost of capital analysis is that firm's business and financial risk are unaffected by acceptance and financ

Write Your Message!

Name

Email id

Message

Verfication Code

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd