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- Explain the theory behind the dividends-based valuation approach. Why are dividends value-relevant to common equity shareholders?2. What are some considerations a company should take into account when establishing dividend policy?(c) One reason for paying dividend is the “clientele effect". Explain how this affects the decision to pay dividend? ee
- Is a company's dividend policy payment important? Please explain why or why not1. Dividend is a financing decision as well as distribution of earnings. Do you agree with the statement? Justify howdoes dividend affect the value of the firm? 2. Compare the effect of distribution of dividends and retained earnings on the value of the firm.A. Why is the goal of financial management to maximize the current share price of the company's stock and not the future share price?
- c) Provide a recommendation to the management of ABC as to whether they should increase/cut back on dividends in the future. Can the dividend policy of ABC (in part b)) be improved on? Motivate your answer.Dividend is a financing decision as well as distribution of earnings. Do you agree with the statement? Justify how does dividend affect the value of the firm? Compare the effect of distribution of dividends and retained earnings on the value of the firm.The dividend policy of a company is a key focus for potential investors. This is because dividends are the main contribution to the assumed investment objective. Hence, it is important that management monitor and review the various factors that influence the company's dividend policy. Critically analyse this statement.
- Is a company's dividend policy important? Please explain why or why notwhich one is correct please confirm? QUESTION 2 Dividend policy can affect the value of the firm for which of the following reasons? a. Personal taxes b. Flotation costs c. Shareholder transaction costs d. All of these are correctThere are a number of factors that need to be taken into consideration as to whether to pay dividend or retain earnings. Discuss four (4) factors to be considered in establishing an optimal dividend or retention policy.