Identify 6 factors a firm must consider when designing dividend policies.

CPA-Financial-Management-Section-3 Revision kit

Factors influencing design for dividend policies
– Legal rules – net profit, capital impairment and insolvency rules. – Liquidity and profitability
-Tax position of shareholders
– Restrictions from band covenants – Access to capital markets.
-Investment needs of the firm and the stage of growth.

Leave a Reply

Your email address will not be published. Required fields are marked *