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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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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CHAPTER 13 DIVIDEND POLICY L E A R N I N G LG1 LG2 LG3 Understand cash dividend payment procedures and the role of dividend reinvestment plans. Describe the residual theory of dividends and the key arguments with regard to dividend irrelevance and relevance. Discuss the key factors involved in formulating a dividend policy. G O A L S LG4 Review and evaluate the three basic types of dividend policies. LG5 Evaluate stock dividends from accounting‚ shareholder
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DIVIDEND DECISION The dividend decision is one of the 3 basic decisions which a financial manager maybe required to take‚ the other two being the investment decisions and the financing decisions. In each period any earnings that remain after satisfying obligations to the creditors‚ the government and the preference sh.hol can either be retained or paid out as dividends or bifurcated between retained earnings and dividends. The retained earnings can be invested in assets which will help
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Topic: DIVIDENDS 1. Payments made out of a firm ’s earnings to its owners in the form of cash or stock are called: A) Dividends. B) Distributions. C) Share repurchases. D) Payments-in-kind. E) Stock splits. Answer: A Topic: REGULAR CASH DIVIDENDS 2. A cash payment made by a firm to its owners in the normal course of business is called a: A) Share repurchase. B) Liquidating dividend. C) Regular cash dividend. D) Special dividend. E) Extra cash dividend. Answer:
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Chapter 14. Residual Dividends Residual Dividend -2011 Net Income $15.0 Million -2012 Net Income increase by 8% -Capital structure 35% Debt‚ 65% Equity -2011 paid $3.0 million cash dividends -2012 invest a major capital project; capital budget for the project is $12.0 million 1. Cash dividends 2012: 3‚000‚000 x (1+0.08) = 3‚000‚000 x 1.08 = 3‚240‚000 payout in 2012 2. Dividend Payout ratio 2012 (8%):
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Executive Summary Gainesboro Corporation was a company who designed and manufactured a number of machinery parts‚ including metal presses‚ dies‚ and molds. The company was found in 1923 in Concord‚ New Hampshire‚ by two mechanical engineers‚ James Gaines and David Scarboro. The two men had gone to school together and were disenchanted with their prospects as mechanics at a farm equipment manufacturer. In the 1940’s Gainesboro produced armored-vehicle and tank parts and miscellaneous equipment
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ABSTRACT The dividend Decision is one of the core elements of modern corporate financial management. A reasonable dividend Decision will help the company in the capital markets and establish a good corporate image for the company’s long-term development and create favorable conditions for the listed company’s financial decision-making‚ dividend Decision has a positive significance. Appropriate dividend distribution Decision can not only set a good corporate image‚ but also to build the confidence
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An Empirical Analysis of Dividend Payout Policy Indian Corporate ABSTRACT In the present paper an attempt has been made to assess the dividend payout policies of Indian Companies. For the purpose of study BSE Sensex -30 companies have been selected as sample for the study. To study impact of profitability‚ liquidity and size of business on dividend payout regression analysis were carried out. An attempt has also been made to calculate estimated dividend payout based on regression results
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