Alternative dividend policies, Financial Management

The managing directors of three profitable listed companies discussed their companies'' dividend policies at a business lunch.

Company A; has deliberately paid no dividends for the last five years.

Company B; always pays a dividend of 50% of earnings after taxation.

Company C; maintains a low but constant dividend per share (after adjusting for general price index), and offers regular scrip issues and shareholder concessions.

Each managing director is convinced that his company''s policy is maximizing shareholders wealth.

Required

What are the advantages and disadvantages of the alternative dividend policies of the three companies? Discuss the circumstances under which each managing director might be correct in his belief that his company''s dividend policy is maximizing shareholders wealth. State clearly any assumptions you make.
Posted Date: 4/21/2013 6:45:32 AM | Location : Zimbabwe







Related Discussions:- Alternative dividend policies, Assignment Help, Ask Question on Alternative dividend policies, Get Answer, Expert's Help, Alternative dividend policies Discussions

Write discussion on Alternative dividend policies
Your posts are moderated
Related Questions
how do we get the pvif of a perpetuity

one page paper reviewing "the Morgan Stanley Oil and Gas Report"

A brief scenario for each of two different organisations is presented. You are advised to read both scenarios before answering the questions that follow. Use the scenario details t

How many types of segments in the mutual fund industry? There are two segments into the mutual fund industry: long-term funds and short-term funds. In Long-term funds bond fund

How to finance the exit of the financiers The company would have to decide how to finance the exit of the financiers. Considerations comprise: (i)  Selling shares to the pub

Trade credit is free credit.  Do you agree or disagree with this statement?  Explain. Trade credit isn't free.  It has a value.  Who bears that cost depends on the conditions o

Q. Show the Motives of Maintaining Receivables? Motives of Maintaining Receivables :- (i) Sales Growth Motives: - The major objectives of credit sales are to increase the to

You have the following information about rates in London for Eurocurrency loans of one-year duration, the exchange rate between the USD and euros, the currency in which you want fi

Interest Rates The payment borrowers make for the use of the funds that they borrow and the payment that lenders demand for the use of the funds they lend (termed interest ) w

Bankers' acceptance is a debt instrument created to smoothen the commercial trade transactions. It is named so because a banker in this case accepts the ultimate