Importance and solution of dividend decisions, Finance Basics

Importance and Solution of Dividend Decisions

Dividends decisions are integral part of a firm's strategic financing decision. It is hence a plan of action adopted by management like as payment of high dividends means less retained earnings and the firm may have to go to the market to borrow for investment purposes. This will increase its gearing level.

Solution to the Dividend Puzzle

A firm's dividend decision may contain some relevance to the firm's share value. The manager thus requires formulating an optimal dividend policy that will maximize the wealth of the shareholders as value of shares.

1. How Much To Pay

Alternative Dividends Policies

2. When to Pay

Firms pay final dividends and interim dividends.  Interim dividends are paid on the middle of the year and are paid in cash.  Final dividends are paid at year ending and can be in cash or bonus question.

3. Dividends Theories (Why Pay Dividends)

Posted Date: 1/31/2013 2:20:55 AM | Location : United States







Related Discussions:- Importance and solution of dividend decisions, Assignment Help, Ask Question on Importance and solution of dividend decisions, Get Answer, Expert's Help, Importance and solution of dividend decisions Discussions

Write discussion on Importance and solution of dividend decisions
Your posts are moderated
Related Questions
Social responsibility - Objectives of Business Entity The firm must decide where to operate strictly in their shareholders' best interests or be responsible to their staff, th

On 1 January 2008, a young artist called Michelangelo signed a contract with a charity named Art Angels, which supports young artists to do large projects. The agreement requires M

Explain the term - Underwriting Underwriting is an agreement whereby underwriter promises to subscribe to a specified number of debentures or shares or a specified amount of

Food and Beverages Rooms, Restaurants and Other Services Other Income Total $ $ $ Sale

The following NPV's have been calculated to determine if a compressor installation should be accelerated from Year 3 to Year 7. The compressor cost is $1,500,000.   a. C

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

You have just taken out a $220,000 loan for your house at an APR of 7.5% and a 30-year term. Payments are to be made monthly . Two years from now, you refinance at an APR of 5.5%

Do your experts provide Future Value of Single or Multiple Cash Flows assignment help? I need urgent help in my college assignment.

Mermaid Coffee Corporation (MCC) has 1,000,000 shares of stock currently trading at $42 per share. The company has issued 20,000 bonds, each with market value $928.59 and yield to

Actions of Shareholders in Agency Conflict a) Disposal of assets required like collateral for the debt in this. In this case the bondholder is exposed to more risk becaus