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How do firms use planning models to help set dividend policy?
Firms use planning models to analyze various financial scenarios and forecast future cash flows, which helps determine the sustainability of dividend payments. These models take into account factors such as earnings projections, capital expenditure needs, and market conditions, allowing firms to assess their ability to return value to shareholders while maintaining operational stability. By simulating different dividend payout ratios and their impact on financial health, firms can establish a balanced dividend policy that aligns with their long-term strategic goals. Ultimately, these models aid in making informed decisions that enhance shareholder value while ensuring financial resilience.
What factors might influence a firm's price-earnings ratio?
The price earnings ratio is influenced by: -the earnings and sales growth of the firms -risk -debt-equity structure of the firm -dividend policy -quality of management -a number of other factors
Why do firms invest and borrow?
Firms invest in order to make dividend and interest income when they have an excessof money over current operating expenses.Firms borrow to pay bills when they have an excess of operating expenses over the cash available.
What is difference between stock dividend and bonus?
Stock dividend is distribution of profit among the investors as shares rather than cash which increase the ownership right of holder of shares as well. Bonus means some thing extra than normal regular income. If some one earning 100 euro per month and he knows in December he will get some extra money from his employer for new years festival,that extra amount what he gets will be his bonus.Stock dividend reduce retained earning and fulfill firms obligation to pay dividend. where bonus is a source of motivation for workers.
Why would a market that consisted entirely of perfectly competitive firms not be 'perfect'?
The concept of perfect competition is based on a large number of small firms, where no single firm can affect the market price. These firms operate as price takers, and use the cost supplied by the market. These ideal companies would insure efficiency. However, perfect competitive firms are unrealistic in real world scenarios.
What is financial signaling in respect of dividend policy?
it suggest that dividend has an impact on share price because they communicate information, signals about the firms profitability.
What is dividend theories and policies?
Dividend policies are concerned with the financial policies that have to do with how, when, and how much regarding paying cash dividend. Dividend policy theories explain the reasoning and arguments that relate to paying dividends by firms Dividend theories include the dividend irrelevance theory that indicates there is no effect on the capital structure of a company or its stock price from dividends.
Who has no interest in dividend policy?
Shareholders who prioritize capital gains over immediate income typically have no interest in dividend policy. These investors focus on the company's growth potential and value appreciation rather than regular dividend payouts. Additionally, firms in high-growth sectors, like technology, often attract investors who prefer reinvested earnings to fuel expansion instead of distributing dividends.
What has the author Andrew Benito written?
Andrew Benito has written: 'Hard Times or Great Expectations?' ''Oscillate Wildly'' 'Financial pressure and balance sheet adjustment by UK firms' 'Hard Times or Great Expectations?: Dividend omissions and dividend cuts by UK firms'
What is definition of multinational firms?
Generally speaking, a multinational business operates in a number of different nation in the world. Its products and services are geared to the countries they operate in. For example, Coca Cola is a multinational business and gears its advertising to the culture of the nations it operates in.
What factors might influence a firm's price-earnings ratio?
The price earnings ratio is influenced by: -the earnings and sales growth of the firms -risk -debt-equity structure of the firm -dividend policy -quality of management -a number of other factors
Why firms invest and borrow?
Firms invest in order to make dividend and interest income when they have an excessof money over current operating expenses. Firms borrow to pay bills when they have an excess of operating expenses over the cash available.
What is the difference between appropriated and unappropriated retained earnings?
Net earning of the firms, included retained earning, dividend etc.
What has the author L Hodgkinson written?
L. Hodgkinson has written: 'The impact of unrelieved advance corporation tax on firms' dividend decisions'
Why do firms invest and borrow?
Firms invest in order to make dividend and interest income when they have an excessof money over current operating expenses.Firms borrow to pay bills when they have an excess of operating expenses over the cash available.
What problems do multinational firms face?
That the other company whants to be better than that one and that one whants to be better than the other one
What was main reason for Luxembourg's prosperity?
Many multinational companies, or firms that do several business in several countries, have their headquarters their. Answer provided by "The World and Its People" Copyright 2005
