Alternative dividend policies, Financial Management

Assignment Help:
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.

Related Discussions:- Alternative dividend policies

Debt ratio, What is the Debt Ratio? Describe please.

What is the Debt Ratio? Describe please.

Define benefits of paying late, What are the benefits of “paying late” (but...

What are the benefits of “paying late” (but not too late) and how do companies attempt to do this? Since money has time value, the later cash is paid, but not as well late, the b

Caselet, suggestion regarding credit limit. should it be approved or not wh...

suggestion regarding credit limit. should it be approved or not what should be the amount of credit limit that electronics give to booth plastics

What are factors influenced the shape of the yield curve, What are number o...

What are number of factors that influence the shape of the yield curve? There are some of factors which influence the shape of the yield curve as follows: (1) Expectations

What do you signify by receivables management, Q. What do you signify by Re...

Q. What do you signify by Receivables Management? Ans. Receivable Management: - The term receivables refer to debt outstanding to the firm by the customers resulting from sale

Bureaucratic management, nestle is an orgnization wether bureacratic approa...

nestle is an orgnization wether bureacratic approach approperiate for the organizational performance or not?

What is online futures trading, Question 1: (a) Briefly explain the Ele...

Question 1: (a) Briefly explain the Electronic Data Interchange (EDI), and list the benefits of EDI. (b) List and describe the main components of MACSS. (c) Explain brief

Define working capital, What is working capital? Working capital contains...

What is working capital? Working capital contains the current assets of the firm.

Explain how earnings available to common stockholders, Explain how earnings...

Explain how earnings available to common stockholders and common stock dividends paid from the current income statement affect the balance sheet item retained earnings. The cha

Factors affecting working capital needs of firms, FACTORS AFFECTING WORKING...

FACTORS AFFECTING WORKING CAPITAL NEEDS OF FIRMS A large no. of reasons influences the working capital requirements of firms.  a number of them are as follows: 1. Nature of

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