Constant payout ratio, Finance Basics

Assignment Help:

Constant payout ratio

1. This is whereas the firm will pay a fixed dividend rate as like 40 percent of earnings. The DPS would consequently fluctuate as the earnings per share changes.

2. Dividends are straightly dependent on the firm's earnings capability and if no profits are made not dividend is paid.

3. This policy generates uncertainty to ordinary shareholders especially who such rely on dividend income and they might demand a higher necessary rate of return.


Related Discussions:- Constant payout ratio

Horizontal financial analysis, For this assignment you are acting as a fina...

For this assignment you are acting as a financial analyst for Apple Inc. Apple Inc. Is one of the most innovative companies worldwide. For example, in November 2012 Apple sold 3 mi

Methods of analyzing investment, Methods of Analyzing Investment Capit...

Methods of Analyzing Investment Capital Budgeting Methods There are two process of analyzing the viability of such investment as: a) Traditional process Pay

Profitability index or p.i., Profitability Index or P.I. P.I. (benefit...

Profitability Index or P.I. P.I. (benefit-cost ratio) = Present value of inflows / Present value of cash outlay Whether P.I. is greater than 1.0, invest and whereas less th

Ros - return on sales-profit margin , ROS - Return on Sales (Profit Margin)...

ROS - Return on Sales (Profit Margin) The Average of the industry ROS was 5.18% for 2004, 4.41% for 2005, and 7.20% for 2006. The chart showed that ROS has been declined f

Determining the rules for resolving conflict, Instructions: Read the Herzbe...

Instructions: Read the Herzberg findings related to extrinsic and intrinsic factors driving job satisfaction, dissatisfaction and motivation. To what extent should employers feel r

Define two instances of liquidity ratio and efficiency ratio, Define two in...

Define two instances of Efficiency Ratio, Liquidity Ratio, Leverage Ratio? 1. Define two instances each of 'Efficiency Ratio', 'Liquidity Ratio', 'Leverage Ratio' and 'Prof

Define new issue market, Define New Issue Market New Issue Market OR P...

Define New Issue Market New Issue Market OR Primary Market New issue market is the segment in which new issues are made.

Trial and error method, Trial and Error Method a) Select any rate of i...

Trial and Error Method a) Select any rate of interest on random and employ it to compute NPV of cash inflows. b) If rate selected produces NPV lower than the cost, want a l

Example of stock market index, Example of Stock Market Index The follo...

Example of Stock Market Index The following six companies constitute the index of democratic republic of Kusadikika.             Company  A  B

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