. The dividend debate is inconclusive and still on-going in the corporate world. In your view,...

. The dividend debate is inconclusive and still on-going in the corporate world. In your view, briefly

discuss some real world factors that may support the payment of high and low dividends.

Solutions

Expert Solution

The payment of dividend is always subject to debate and it must be paid after consideration of these real world factors such as-

A. Liquidity in the overall economy-if there is a high level of liquidity in the overall economy, payment of dividend is a good option because there would be adequate cash in hand but if there is low liquidity in the overall economy, the payment of dividend is not a good option

B. Rate of return on investment-is the rate of return on reinvestment is high the company should not be focused much on paying on the dividend and it should always be focused on reinvesting its profits while if the rate of return on investment is quite lower than the company should pay the dividend instead.

C. Risk associated with the company is lower in nature then the company should always pay the dividend, if risk is high for the company then it should focus on saving its reserves.

D. if dividend is leading to an increase in the share price of the company, it should be paying out on the dividend and maintain the uniformity else,if the payment of dividend is not having a significant repercussion on the share price of the overall company, then the company should decide against payment of dividend.

E.if it is a growth company then dividend should not be paid and if it is a mature company then it should be focusing on paying out dividend by distribution of it's cash.

jeff jeffy answered 1 year ago

Next > < Previous

Related Solutions

The dividend debate is inconclusive and still on-going in the corporate world. In your view, briefly...

The dividend debate is inconclusive and still on-going in the corporate world. In your view, briefly discuss some real world factors that may support the payment of high and low dividends.

c. The dividend debate is inconclusive and still on-going in the corporate world. In your view,...

c. The dividend debate is inconclusive and still on-going in the corporate world. In your view, briefly discuss some real world factors that may support the payment of high and low dividends.

The debate is still going on in the country whether Fiscal policy is relevant. In at...

The debate is still going on in the country whether Fiscal policy is relevant. In at least 3 paragraphs make a case for the use of fiscal policy showing the rational for using it.

If your directional view is that stock prices are going to fall, you should (a) Sell...

If your directional view is that stock prices are going to fall, you should (a) Sell stock now. (b) Sell call options. (c) Buy put options. (d) All of the above are profitable strategies.

does culture impact an individual’s world view? Explain your answer

MArketing Debate: Take a Position on: Mass marketing is dead Versus Mass marketing is still a...

MArketing Debate: Take a Position on: Mass marketing is dead Versus Mass marketing is still a viable way to build a profitable brand

Express your view with theoretical explanation : Why organizations must consider CSR (Corporate Social Responsibility) as...

Express your view with theoretical explanation : Why organizations must consider CSR (Corporate Social Responsibility) as a strategic alternative? Apply the triple bottom line concept to an organization of your choice and analyze the strategic intent of the selected organization by using the CSR six stage process.

Whether liberating or alienating, we are still interdependent, and in a world of strangers it is...

Whether liberating or alienating, we are still interdependent, and in a world of strangers it is they on whom we must rely. I trust the skill of people around the world when I buy my clothes, drive my car, and eat my food. I trust engineers, contractors, and inspectors when I cross a bridge, ride an elevator, or fly in an airplane. I trust I will receive fair treatment by such strangers as librarians, ambulance drivers, nurses or doctors, policemen...

Explain online retailing and debate on its advantages and challenges for today’s world.

Corporate Finance *Going Private: absence of a public float Two methods of going private: 1- A...

Corporate Finance *Going Private: absence of a public float Two methods of going private: 1- A publicly owned company purchased by a private company or a private equity fund. 2- Repurchasing all publicly traded shares from stockholders. My question is: Leveraged buyout an easy way to go private. Please explain why or how?

Subjects