Importance and solution of dividend decisions, Finance Basics

Assignment Help:

Importance and Solution of Dividend Decisions

Dividends decisions are integral part of a firm's strategic financing decision. It is hence a plan of action adopted by management like as payment of high dividends means less retained earnings and the firm may have to go to the market to borrow for investment purposes. This will increase its gearing level.

Solution to the Dividend Puzzle

A firm's dividend decision may contain some relevance to the firm's share value. The manager thus requires formulating an optimal dividend policy that will maximize the wealth of the shareholders as value of shares.

1. How Much To Pay

Alternative Dividends Policies

2. When to Pay

Firms pay final dividends and interim dividends.  Interim dividends are paid on the middle of the year and are paid in cash.  Final dividends are paid at year ending and can be in cash or bonus question.

3. Dividends Theories (Why Pay Dividends)


Related Discussions:- Importance and solution of dividend decisions

Dividend basis valuation, Dividend Basis Valuation Ownership of shares...

Dividend Basis Valuation Ownership of shares in entities - The owner to obtain a cash flow consisting of future dividends and the value of a share must correspond to the recen

determine the benefit - cost and benefit/cost ratios, A City has determine...

A City has determined that building a new water distribution system using a new source of water would have an annual costs of $5,750,000 and annual net benefits of $4,250,000. The

Advantages of development financial institutions, Advantages of Development...

Advantages of Development Financial Institutions Advantages or Functions or can say Case for Development Financial Institutions 1. They grant venture capital 2. They gra

Accounting rate of return method or arr, Accounting Rate of Return Method o...

Accounting Rate of Return Method or ARR This method utilizes accounting profits from financial status to assess the viability of investment proposal via diving the average inc

Terms used in capital market authority, Terms used in Capital Market Author...

Terms used in Capital Market Authority 1. ACCOUNTS fourteen (14) days durations into that the stock exchange trading calendar is divided. 2. ACCOUNTS DAY - Sixth or sev

Evaluate the fair value of the stock, Lavista Ltd is a leading music entert...

Lavista Ltd is a leading music entertainment company in the country and the stocks of the company are actively traded in the stock exchange. For the year just ended few days back

Solutions - shareholders and management conflict, Solutions - Shareholders ...

Solutions - Shareholders and Management Conflict Conflicts between management and shareholders may be resolved as follows like: 1. Pegging or attaching managerial compens

Explain about the new issue market, Explain about the New Issue Market OR P...

Explain about the New Issue Market OR Primary Market New issue market is the segment in which new issues are made. In new issue market, new issues may be made in 3 ways name

Factors of capital structure, Factors of Capital Structure 1. Availab...

Factors of Capital Structure 1. Availability of securities - This influences the company's employ of debt finance that means such if a company has enough securities, so then

Miller-orr model, Miller-Orr Model Unlike the Baumol's Model, Miller-O...

Miller-Orr Model Unlike the Baumol's Model, Miller-Orr Model is a stochastic or like probabilistic model that creates the more realistic assumption of doubt in cash flows.

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