Question

Identify five factors that complicate insurers’ dividend decisions.

Identify five factors that complicate insurers’ dividend decisions.

Homework Answers

Answer #1

Five factors that complicate insurers' dividend decisions are as follows:

1. Is the firm's income is stable: insurers need to check if earning is stable or not and as per that he has to pay dividend

2. Better use of profit by investing in new opportunities

3. Tax consideration: it is one one most important factor which complicate dividend decision

4. Economic Condition: if market is going to perform bad then insurers' will hold the dividend to keep more cash

5. Legal consideration: sometime insurers' need to pay certain dividend to its shareholder

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