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Managerial Finance And Dividend Policy - Case Study Example

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The paper "Managerial Finance And Dividend Policy" discusses why the companies pay dividends and what are some of the implications for paying the dividends for the firm and the managers. It also discusses how the payment of dividends can affect the firm value…
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Managerial Finance And Dividend Policy
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Download file to see previous pages In order to continuously attract the attention of the investors intact despite the fact that theoretically dividends and dividend policies do not matter most to the overall reputation and value generating capability of the firm.
There are various dividend policies that companies adapt during the course of their business as such policies largely depend upon the ability of the company to consistently pay out the dividends. Major types of dividend policies include providing consistent payouts either in the form of cash or stock splits. These policies often depend upon the ability of the firm to pay off dividends in the most consistent manner thus constantly relaying a signal to the market regarding the ability of the firm to pay returns to shareholders.
This paper will discuss the critical aspect of why the companies pay dividends and what are some of the implications for paying the dividends not only for the firm but for the managers of the firms as well besides discussing as to how the financial managers use dividends in their overall financial policies and how the payment of dividends can affect the firm value.
Dividends are the returns that are paid by the firm to its shareholders as their portion of the profits earned by the firm. It is, however, critical to understanding that it is not necessary that a firm shall pay dividends only when they earn profits as many firms despite incurring losses provide dividends to their shareholders. Many companies in the US provide quarterly dividends however this frequency may vary in different countries according to the practices that may be prevalent in that particular country. However, most of the firms across all over the world offer dividends either on a semi-annual or annual basis based on the practices. ...Download file to see next pagesRead More
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