Principles of Managerial Finance (14th Edition) (Pearson Series in Finance)
14th Edition
ISBN: 9780133507690
Author: Lawrence J. Gitman, Chad J. Zutter
Publisher: PEARSON
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Question
Chapter 14.4, Problem 14.9RQ
Summary Introduction
To discuss: The five factors that the firms consider on establishing dividend policy.
Introduction:
Dividend is a sum of money paid to the shareholders of the company. It is distributed among the investors from the portion of company’s earnings. It is paid by the company to the shareholders either in the form of cash or stock.
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What factors fo firms consider in establishing dividend policy? Briefly describe each of them
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Chapter 14 Solutions
Principles of Managerial Finance (14th Edition) (Pearson Series in Finance)
Ch. 14.1 - What two ways can firms distribute cash to...Ch. 14.1 - Why do rapidly growing firms generally pay no...Ch. 14.1 - The dividend payout ratio equals dividends paid...Ch. 14.2 - Prob. 1FOPCh. 14.2 - Prob. 14.4RQCh. 14.2 - Prob. 14.5RQCh. 14.2 - Prob. 14.6RQCh. 14.3 - Does following the residual theory of dividends...Ch. 14.3 - Contrast the basic arguments about dividend policy...Ch. 14.4 - Prob. 14.9RQ
Ch. 14.5 - Describe a constant-payout-ratio dividend policy,...Ch. 14.6 - Why do firms issue stock dividends? Comment on the...Ch. 14.6 - Compare a stock split with a stock dividend.Ch. 14 - Prob. 1ORCh. 14 - Prob. 14.1STPCh. 14 - Prob. 14.1WUECh. 14 - Prob. 14.2WUECh. 14 - Prob. 14.3WUECh. 14 - Prob. 14.4WUECh. 14 - Prob. 14.5WUECh. 14 - Dividend payment procedures At the quarterly...Ch. 14 - Prob. 14.2PCh. 14 - Prob. 14.3PCh. 14 - Dividend constraints The Howe Companys...Ch. 14 - Prob. 14.5PCh. 14 - Prob. 14.6PCh. 14 - Prob. 14.7PCh. 14 - Prob. 14.8PCh. 14 - Stock dividend: Firm Columbia Paper has the...Ch. 14 - Cash versus stock dividend Milwaukee Tool has the...Ch. 14 - Stock dividend: Investor Sarah Warren currently...Ch. 14 - Stock dividend: Investor Security Data Company has...Ch. 14 - Stock split: Firm Growth Industries current...Ch. 14 - Prob. 14.14PCh. 14 - Stock split versus stock dividend: Firm Mammoth...Ch. 14 - Prob. 14.16PCh. 14 - Prob. 14.17PCh. 14 - Prob. 14.18PCh. 14 - Prob. 14.19P
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- There are a number of factors that need to be taken into consideration as to whether to pay dividend or retain earnings. Discuss four (4) factors to be considered in establishing an optimal dividend or retention policy.arrow_forwardWhat factor should be kept in mind while deciding a dividend policyarrow_forwardWhat is “catering theory,” and how does it impact a firm’s dividend policy?arrow_forward
- which one is correct please confirm? QUESTION 9 The value of a firm is influenced by three types of financial decisions, including all of the following EXCEPT ____. a. par value decisions b. financing decisions c. investment decisions d. dividend decisionsarrow_forwardWhat are the factors favoring a high-dividend policy?arrow_forwardBriefly discuss dividend relevance and dividend irrelevance. Theory M&M = argumentsarrow_forward
- What is dividend policy? Discuss the factors that influence a company's dividend policy. What are the key theories explaining dividend policy?(Subject: General Finance)arrow_forwardwhich one is correct please confirm? QUESTION 10 Dividend policy can affect the value of the firm for which of the following reasons? a. Personal taxes b. Flotation costs c. Shareholder transaction costs d. All of these are correctarrow_forwardWhich of the following is the primary goal of a firm? Select one: O a. maximize stockholder wealth O b. maximize dividend payments Oc minimize expenses O d. satisfaction of suppliersarrow_forward
- If the financial markets are competitive and complete, which ones of the following goals of a firm are equivalent? I. Earnings maximization II. Earnings per share maximization III. Share value maximization IV. Maximizing the utility of existing shareholders I and II Il and III II, III and IV III and IVarrow_forwardWhich of the following are the THREE key areas covered by financial management decisions? Investment Cash flow Finance Dividendarrow_forwardDiscuss three ratios that indicate how the company is increasing the wealth of the shareholders?arrow_forward
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Dividend explained; Author: The Finance Storyteller;https://www.youtube.com/watch?v=Wy7R-Gqfb6c;License: Standard Youtube License