Your question: Which of the following is an argument for the relevance of dividends?

What is the importance of dividends?

Dividends are an important consideration when investing in the share market as they provide a reliable source of return. The payment of a dividend is much more dependable than an increase in capital growth in a given year.

Which of the following are theories for dividend relevance Mcq?

What is not a form of dividend?

Q. Which of the following are theories for dividend relevance?
B. mm approach
C. game theory
D. market value theory
Answer» a. walter’s model

Which is not the form of dividend Mcq?

Which of the following stresses on investor’s preference reorient dividend thanhigher future capital gains ?

Q. What is not a form of dividend?
B. bonus shares(stock dividend)
C. share split
D. split reverse
Answer» d. split reverse

Which of the following are true of stock splits except?

All of the following are true of stock splits EXCEPT: market price per share is reduced after the split. the number of outstanding shares is increased.

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What is a dividend and why is it important?

As dividends are a form of cash flow to the investor, they are an important reflection of a company’s value. It is important to note also that stocks with dividends are less likely to reach unsustainable values. Investors have long known that dividends put a ceiling on market declines.

What are the factors which affect the dividend decision of a company?

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) …

Which one of the following is are the relevance theory?

In the fields of pragmatics and semantics (among others), relevance theory is the principle that the communication process involves not only encoding, transfer, and decoding of messages, but also numerous other elements, including inference and context. It is also called the principle of relevance.

What is decided in dividend decision?

Dividend decision determines the division of earnings between payments to shareholders and retained earnings. … The dividend decision, which consider the amount of funds retained by the company and the amounts to be distributed to the shareholders, is closely linked to both investment and financing decisions.

What does Gordon’s bird in the hand argument suggests?

Question: Gordon’s “bird-in-the-hand” argument suggests that dividends are irrelevant. … shareholders are generally risk averse and attach less risk to current dividends. the market value of the firm is unaffected by dividend policy.

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Which one of the following are sources of dividends?

Dividend received is exempt in the hands of the shareholders, in respect of which Corporate Dividend Tax has been paid by the company. Dividend can be paid out of following sources: Out of current year’s profit. Out of past year’s profit lying in profit & loss account.

In which theory dividend decision does not affect the shareholders wealth and valuation of the firm Mcq?

2. Relevance Theory : According to relevance theory dividend policy affects value of firm, thus it is called relevance theory. ◦According to this theory, dividend policy has no effect on the wealth of the shareholders or prices of the shares and hence it is irrelevant so far as the valuation of the firm is concerned.