ECONOMICS
FINANCIAL MARKETS
|
Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
|
|
|
acquiring a competitive firm.
|
|
|
determining how much to pay for a specific asset.
|
|
|
paying dividends to shareholders.
|
|
|
deciding whether or not to increase the price of its products.
|
Detailed explanation-1: -As per this policy the percentage of dividends paid out of earnings remains constant. Example: if a company adopts a 30% payout ratio and if EPS is Rs 100, then shareholder having 10 shares will receive Rs. 300 as dividend under this policy.
Detailed explanation-2: -An example of a firm’s financing decision would be:-acquiring a competitive firm.-determining how much to pay for a specific asset.-issuing 10-year versus 20-year bonds.
Detailed explanation-3: -3. Dividend Decision: ADVERTISEMENTS: A financial decision which is concerned with deciding how much of the profit earned by the company should be distributed among shareholders (dividend) and how much should be retained for the future contingencies (retained earnings) is called dividend decision.
Detailed explanation-4: -Dividend decision determines the division of earnings between payments to shareholders and retained earnings. The Dividend Decision, in Corporate finance, is a decision made by the directors of a company about the amount and timing of any cash payments made to the company’s stockholders.