Question

Should a company pay dividends, if it able to? What influences this decision? Should they be paid in cash or stock?

Answer 1

Answer : Yes.,if is able to it might pay by considering the following factors.

The decision of dividend payment is influenced by the following factors:

Growth and profitability,Liquidity,Cost and Availability of Alternative Forms of financing,etc.

Whether the payment should be made in cash or stock will be decided on availability of cash and reserves. If the cash is more than reasonable amount then should be paid in cash otherwise it should be adjusted on availability of reserves.

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