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.

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