Stability of dividend policy. There may be three types of dividend policy (1) Strict or Conservative dividend Policy which envisages the retention of profits on the cost of dividend pay-out. It helps in strengthening the financial position of the company; (2) Lenient Dividend Policy which views the payment of dividend at the maximum rate possible taking in view the current earing of the company. Under such policy company retains the minimum possible earnings; (3) Stable Dividend Policy suggests
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Dividend Policy Factors Affecting Dividend Policy: 1. External Factors 2. Internal Factors External Factors Affecting Dividend Policy 1. General State of Economy: * In case of uncertain economic and business conditions‚ the management may like to retain whole or large part of earnings to build up reserves to absorb future shocks. * In the period of depression the management may also retain a large part of its earnings to preserve the firm’s liquidity position. * In periods of
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FM ASSIGNMENT ON DIVIDEND POLICY Submitted To: Prof. Ramana Rao By Group 1‚ Ganesh Behera (22074) Udaya Bhaskar (22071) Kasu Varma (22101)
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THE THREE DIVIDEND POLICY THEORIES Figure 13A-1 illustrates the three alternative dividend policy theories: (1) Miller and Modigliani’s dividend irrelevance theory‚ (2) Gordon and Lintner’s bird-in-thehand theory‚ and (3) the tax preference theory. To understand the three theories‚ consider the case of Hardin Electronics‚ which has from its inception plowed all earnings back into the business and thus has never paid a dividend. Hardin’s management is now reconsidering its dividend policy‚ and it wants
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capitalization on the dividend rate. The study reveals that as per dividend irrelevance theory dividend policy has no influence on value of the firm for the reason of homemade dividend according to dividend relevance theory‚ value of the firm is influenced by dividend policy because of certainty‚ information content and clientele effect; liquidity‚ availability of worthwhile projects‚ availability of alternative funds‚ profitability‚ growth‚ leverage‚ reaction of market to dividend reduction‚ ownership
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Dividend Policy DEANNA PEREZ FASHIONS‚ INC. Directed As a young adult in her mid-twenties‚ Deanna Perez emigrated from Spain with her family to New York City in the early 1950s. Deanna was artistically inclined and loved women’s fashions. Even as a young girl‚ Deanna had spent hours drawing‚ designing‚ and sewing outfits for her dolls; consequently‚ it was no surprise to her family when she took a job in the fashion industry. It was Deanna’s dream to someday be successful‚ wealthy‚ and own
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Introduction The optimal dividend policy of a firm depends on investor’s desire for capital gains as opposed to income‚ their willingness to forgo dividend now for future returns‚ and their perception of the risk associated with postponement of returns. However any normative approach to dividend policy intended to be operative under real world conditions should consider the firms investment opportunities‚ any preferences that investors have for dividends as opposed to capital gains and vice
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DIVIDEND POLICY DETERMINANTS: AN INVESTIGATION OF THE INFLUENCES OF STAKEHOLDER THEORY by Mark E. Holder‚ Frederick W. Langrehr‚ J. Lawrence Hexter There is considerable debate on how dividend policy affects firm value. Some researchers believe that dividends increase shareholder wealth (Gordon‚ 1959)‚ others believe that dividends are irrelevant (Miller and Scholes‚ 1978)‚ and still others believe that dividends decrease shareholder wealth (Litzenberger and Ramaswamy‚ 1979). Financial management
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Xavier institute of social service‚Ranchi ANALYSIS OF DIVIDEND POLICY OF HERO MOTO CORP & TVS MOTOR . By Anand Shankar Prity sagar Geeta shree pingua Hero Motocorp Ltd.‚ formerly Hero Honda‚ is an Indian motorcycle and scooter manufacturer
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Paying out dividends belongs to the easiest way to communicate financial well-being and shareholder value‚ since they are sending out a powerful message about future prospects and performances. The willingness‚ and also the ability of companies to pay out steady dividends and maybe even to increase them‚ provides the shareholder with valuable information about the company ’s fundamentals. Wherever you are looking for information regarding dividends‚ you will find statements about their affection
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