Chapter 19, Problem 5MC

Summary Introduction

To determine: The Implications of Paying Dividend or Upgrading and Expanding the Manufacturing Capacity.

Introduction:The term dividends allude to that portion of proceeds of an organization which is circulated by the organization among its investors. It is the remuneration of the investors for investments made by them in the shares of the organization.  A dividend policy is an organization's way to deal with disseminating revenues back to its proprietors or investors. In the event that an organization is in a development stage, it might conclude that it won't pay profits, but instead re-contribute its retained earnings in the business.