Your question: What is dividend policy explain the factors determining the dividend policy?

What are the factors determining dividend policy?

There are several factors which affect dividend policy, the most important of which are the following: (a) legal rules, (b) liquidity position, (c) the need to pay off debt, (d) restrictions in debt contract, (e) rate of expansion of assets, (f) profit rate, (g) stability of earnings, (h) access to capital markets, (i) …

What is dividend policy explain the factors affecting dividend policy?

The expected dividend payout is influenced by many factors such as after tax earnings, availability of cash, shareholders expectation, expected future earnings, liquidity, leverage, return on investment, industry norms as well as future earnings.

What is meant by dividend policy?

A dividend policy is the policy a company uses to structure its dividend payout to shareholders. Some researchers suggest the dividend policy is irrelevant, in theory, because investors can sell a portion of their shares or portfolio if they need funds.

What is dividend decision explain any 5 factors which affect dividend decision?

(i) Stability of dividend (ii) Shareholders’preference. (iii) Legal constraints (iv) Access to capital market. Explain the following as factors affecting dividend decision. (i) Stability of earnings (ii) Growth opportunities. (iii) Cash Flow position (iv) Taxation policy.

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