Dividend policy, Financial Management

Assignment Help:

DIVIDEND POLICY

Dividends provide the portion of a firm's net earnings which are paid out to the shareholders.

the objective of financial management of maximizing the shareholders' wealth, the firm would be well advised to use the gross profits for paying dividends to shareholders, if it will direct to the maximization of the wealth of the owners. If not, the firm should rather retain them to finance investment programs.

But, there are conflicting believes regarding the impact of dividends on the valuation of the firm. As per the one school of thought, dividends are inappropriate so that the amount of dividends paid has no effect on the valuation of a firm. Alternatively, certain theories believe the dividend decision as relevant to the value of the firm measured in terms of the market price of the shares.


Related Discussions:- Dividend policy

Explain the strategic alliance, Explain the Strategic alliance Two  or ...

Explain the Strategic alliance Two  or  more  organisations  agree  to  work  and  collaborate  informally  together  however remaining  independent  from  one  another. Simila

Leverage, what is financial leverage

what is financial leverage

Accumulate the money necessary for your retirement, You plan to retire in 3...

You plan to retire in 35 years and can invest to earn 7 percent. You estimate that you will need $85,000 at the end of each year for an estimated 25 years after retirement, and you

Agency mortgage-backed securities, Agency Mortgage-Backed Securities ...

Agency Mortgage-Backed Securities (AMBS) are securities that are backed by the mortgage loans. These securities include mortgage passthrough securities, stripped

Financial Analysis of Carrefour & Tesco Supermarkets, comparative analysis ...

comparative analysis on these two food retailing giants

FDD , fimnancial accounting system

fimnancial accounting system

Explain the concepts of planning the work, Explain the concepts of Planning...

Explain the concepts of Planning the work Determine scope and objective of the audit (to verify assets, to check adequacy of internal controls etc...). Ensuring appropr

Explain about deferred payment, Q. Explain about Deferred Payment? supp...

Q. Explain about Deferred Payment? suppose a person take a loan of a specified amount at a given rate of the interest. he wants to repay this loan together with the interest in

Explain process of financial control, Financial Control: - The establishmen...

Financial Control: - The establishment as well as use of financial control devices is an important function of financial management. These devices comprise: Budgetary Contro

Working capital turnover, Definition of 'Working Capital Turnover': A ...

Definition of 'Working Capital Turnover': A calculation comparing the depletion of working capital to the generation of sales over a provided period. This provides some useful

Write Your Message!

Captcha
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!

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