Constant payout ratio, Finance Basics

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.

Posted Date: 1/31/2013 2:21:27 AM | Location : United States







Related Discussions:- Constant payout ratio, Assignment Help, Ask Question on Constant payout ratio, Get Answer, Expert's Help, Constant payout ratio Discussions

Write discussion on Constant payout ratio
Your posts are moderated
Related Questions
Functions of Central Bank a) Ensure Economic stability b) Lender to the government c) Printing of currency notes d) Banker to the government e) Lender of last reso

Dividend yield or Gordon's Model This model is used to determine the cost of various capital components in particular: Cost of equity - K e Cost of preferenc

What is Holding Period Return/Return Holding period yield (HPY) measures the total return from an investment during a given time period in which asset is held by the investo

Discuss the applicabilty of an operating cycle to poultry business(consider broilers)

Miller-Orr Model Unlike the Baumol's Model, Miller-Orr Model is a stochastic or like probabilistic model that creates the more realistic assumption of doubt in cash flows.

Stock Repurchase The company can buy back also several of its outstanding shares instead of paying cash dividends. This is identified as stock repurchase and or bought back or

Instructions 1 This case study counts as part of your group project. 2 Project Group: You must complete this assignment together with the group that you initially registered

•How did the stock market indices react to these changes? •How did long-term U.S. Treasury bond yields react to these changes? •What happens to borrowers, savers, investors, and

according to given specialization take down an industry and investigate its managerial hierarchy to describe each of one of the managerial work level functioning

Net Present Value Method - Example Jeremy limited wishes to expand its output by purchasing a new machine worth 170,000 and installation costs are estimated at 40,000/=.  In t