The following listed businesses each have differen policies concerning distributions to shareholders: North Plc pays all profits available for distribution to shareholders in the form of a cash dividend each year. South Plc has yet to pay any cash dividends to shareholders and has no plans to make dividend payments in the foreseeable future West Plc buys back shares from shareholders as an alternative to a dividend payment East Plc offers shareholders the choice of either a small but stable cash dividend or a scrip dividend each year Required: Discuss the advantages and disadvantages of each of the above policies.
The following listed businesses each have differen policies concerning distributions to shareholders: North Plc pays all profits available for distribution to shareholders in the form of a cash dividend each year. South Plc has yet to pay any cash dividends to shareholders and has no plans to make dividend payments in the foreseeable future West Plc buys back shares from shareholders as an alternative to a dividend payment East Plc offers shareholders the choice of either a small but stable cash dividend or a scrip dividend each year Required: Discuss the advantages and disadvantages of each of the above policies.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
| The following listed businesses each have differen policies |
| concerning distributions to shareholders: |
| North Plc pays all profits available for distribution to shareholders |
| in the form of a cash dividend each year. |
| South Plc has yet to pay any cash dividends to shareholders and |
| has no plans to make dividend payments in the foreseeable |
| future |
| West Plc buys back shares from shareholders as an alternative to |
| a dividend payment |
| East Plc offers shareholders the choice of either a small but |
| stable cash dividend or a scrip dividend each year |
| Required: |
| Discuss the advantages and disadvantages of each of the |
| above policies. |
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