Legal rules - factors influencing dividend, Finance Basics

Assignment Help:

Legal Rules - Factors Influencing Dividend

a) Net purchase rule

States that dividend may be paid from company's profit either past or present.

b) Capital impairment rule

Prohibits payment of dividends from capital i.e. from sale of ssets. This is liquidating the firm.

c) Insolvency rule

Prohibits payment of dividend whenever company is insolvent.  Insolvent company is once where assets are less quite than liabilities. Insolvent company is one whereas assets are less quite than liabilities.  During such a case every earnings and assets of company belong to debt holders and not any dividends is paid.


Related Discussions:- Legal rules - factors influencing dividend

Effective financial management, Financial management is very important for ...

Financial management is very important for any organization as at the end what does matter is the money. An effective financial management is of high importance for ensuring the be

Cost of retained earnings common equity, Clemson Software is considering a ...

Clemson Software is considering a new project whose data are shown below. The required equipment has a 3-year tax life, after which it will be worthless, and it will be depreciate

Type of partnerships, Type of Partnerships There are two main kinds of ...

Type of Partnerships There are two main kinds of partnerships. Namely: Ordinary Partnership - An ordinary partnership is one in which all members have unlimited liability.

Basic eoq model, Basic EOQ Model The basic inventory decision model is...

Basic EOQ Model The basic inventory decision model is Economic Order Quantity or called EOQ model. This model is specified via the following equation as: Whereas:Q is

Determinants of working capital needs, Determinants of Working Capital Need...

Determinants of Working Capital Needs There are few factors that determine the firm's working capital needs. These factors are comprehensively enclosed with a Textbook of Busi

Legal rules - factors influencing dividend, Legal Rules - Factors Influenci...

Legal Rules - Factors Influencing Dividend a) Net purchase rule States that dividend may be paid from company's profit either past or present. b) Capital impairment r

Growth rates and hypothetically, Growth Rates Most ...

Growth Rates Most Recent Fiscal Year Fiscal Year (-1) Fiscal Year (-2) Fiscal Year (-3) Annu

Present value of an annuity - dcf technique, Present Value of an Annuity - ...

Present Value of an Annuity - DCF Technique An individual investor may not necessarily acquire a lump sum after several years however rather obtain a constant periodic amount

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

Vincent mind set, if u were the professor wht your opinion about vincent mi...

if u were the professor wht your opinion about vincent mind stage

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