Question

Dividend policy is influenced by: A)        the desire of a company for growth. B)        the difficulty...

Dividend policy is influenced by:

A)        the desire of a company for growth.

B)        the difficulty of obtaining funds from other sources.

C)        the perceived preference of shareholders for dividend income.

D)        all of the above.

Business   Finance   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

d) All of the above
Because lower dividend payout higher will be the retention ratio and higher will be the growth . Growth = (1- dividend payout) * Return on Equity.
Retained earnings are a very important source of capital. By lowering dividend payout or by delaying it the retained earnings increases which can be used than other costlier and riskier. Sources of capital
Dividend policy is also done to stimulate the market and bring trust of the shareholders. Regular dividend payments are better for the investors

Best of Luck. God Bless

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Assume that a company in the early stages of growth has financed itself using only a...
Assume that a company in the early stages of growth has financed itself using only a very small percentage of debt in its capital structure. It pays no dividends to its shareholders. Do you expect this capital structure and dividend policy to be maintained over the life of the company as it grows and eventually matures? Clearly explain how the financing needs and of a newly established company are likely to change over time and how the appropriateness of the...
P/E ratios are influenced by a company's a. Growth rate                         b. Risk c. Capital structure    &nb
P/E ratios are influenced by a company's a. Growth rate                         b. Risk c. Capital structure                  d. Management           e. All of the above and more 1According to the National Bureau of Economic Research a recession is two or more quarters of a.negative nominal Gross Domestic Product (GDP) growth b.negative real GDP growth c.a rate of inflation which exceeds real GDP growth d.none of the above 13.       The goal of an efficient portfolio is to a.maximize risk for a given level of...
Which of the following examples best represents a passive dividend policy? a. The firm sets a...
Which of the following examples best represents a passive dividend policy? a. The firm sets a policy such that the proportion of dividends paid from net income remains constant. b. The firm pays dividends with what remains of net income after taking acceptable investment projects. c. The firm sets a policy such that the quantity (dollar amount per share) of dividends paid from net income remains constant. d. All of the above are examples of various types of passive dividend...
A company wants to implement a capital growth policy. In the current year it has 20...
A company wants to implement a capital growth policy. In the current year it has 20 millions in net income. How much income should it distribute in dividend in order to pursue this strategy
If a company decides to increase its dividend payments policy what will be the impact on...
If a company decides to increase its dividend payments policy what will be the impact on the following ratios (all other being equal)? Total debt to equity        Times interest earned Select one: a. None                               Increase b. None                               None c. Increase                         None d. Increase                          Increase e. Decrease                         None
which type of fit. is like to have a high dividend payout ratio policy? a. a...
which type of fit. is like to have a high dividend payout ratio policy? a. a younger firm with uncertain income but significant growth opportunities. b. an older firm with steady earnings but few growth opportunities. c. an older firm with irregular income and significant growth opportunities d. a younger firm with significant income and super normal positive growth opportunities
Which of the following is false? A. For a constant dividend growth stock, the stock price...
Which of the following is false? A. For a constant dividend growth stock, the stock price is expected to grow at a rate equal to the dividend growth rate. B. For the constant dividend growth model, the required return must be larger than the constant dividend growth rate. C. As with bonds, the current price of a stock is the future value of all expected cash flows. D. Financial managers attempt to maximize the value of the firm by increasing...
When a company issues a stock dividend which of the following would not be affected? a)...
When a company issues a stock dividend which of the following would not be affected? a) Total Shareholders' equity b) Total assets c) Total liabilities d) All of the above
Which of the following statements about shares is correct, all other things being equal? Select one:...
Which of the following statements about shares is correct, all other things being equal? Select one: a. Dividends to ordinary shareholders are contractual obligations. b. Dividends to preference shareholders are contractual obligations. c. A lower required rate of return implies a lower share value. d. A higher dividend growth rate implies a higher share price.
The argument that homemade dividends would lead to the irrelevance of dividend policy hinges critically on...
The argument that homemade dividends would lead to the irrelevance of dividend policy hinges critically on the assumption Select one: a. that shareholders are willing to buy more shares. b. that the capital asset pricing model can be used to value shares. c. of no taxes and transaction costs. d. that the company will issue more shares. e. of stable dividend payment. In terms of changes in the number of shares outstanding, a 20% stock dividend is equivalent to a...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT