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प्रश्न
Explain the following as factor affecting dividend decision:
Cash flow position
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उत्तर
Cash Flow Position: Payment of dividends implies a cash outflow from the company. If a company has lesser cash (low liquidity), then it will not be able to pay many dividends. Even with higher profits, a company would not be able to pay many dividends even when it has less cash.
संबंधित प्रश्न
Vasvi was a student of Commerce in class XII. Her father was a farmer, who grew different varieties of wheat and was well versed about various aspects of wheat cultivation. He was also selected by the government for a pilot-project on wheat cultivation. As a project, she decided to study the feasibility of marketing good quality wheat at the reasonable price. Her father suggested to her to use the internet to gather customers’ views and opinions. She found that there was a huge demand for organic packed wheat. She knew that there were no pre-determined specifications in case of wheat, because of which it would be difficult to achieve uniformity in the output. To differentiate the product from its competitors, she gave it the name of ‘Mahan-organic wheat’ and classified it into three different varieties namely — Popular, Classic and Supreme, based on the quality. She felt that these names would help her in product differentiation.
Explain the three functions of marketing, with reference to the above paragraph
Explain the following as factor affecting dividend decision:
Stability of dividends
Explain the following as factor affecting dividend decision:
Access to capital market
Explain the following as factor affecting 'financing decision'.
Cash flow position of the business
Explain the following as factor affecting 'financing decision'.
Level of fixed operating cost
Give the meaning of ‘Investment’ and ‘Dividend’ decisions of financial management.
Explain the factors affecting the dividend decision.
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NB Ltd. is India's largest manufacturer of cement. Its operations are spread throughout the country with 17 modern cement factories. It has a workforce of 9,000 people. Since its inception, the company has been a trendsetter in the cement industry. The company is planning to grow in the long run and wants to double its capacity in the next 3 years. For this, the Finance Manager has to decide about the quantum of finance to be raised from various long-term sources. For this, he needs to identify various available sources of funds and the proportion of funds from each source. |
- Identify the financial decision to be taken by the Finance Manager.
- State any four factors which would affect the decision identified in (i) above.
Besides the total amount of long-term finance required, what must a business identify?
Which set of outcomes is affected by a financing decision?
What are shareholders’ funds?
What combination must a firm select when choosing between debt and equity?
Which statement about payment of dividends on equity is correct?
Why is cheaper debt not automatically the best source of finance?
Which statement about the cost of sources of finance is correct?
How does a higher floatation cost affect a financing source?
How does higher financial risk affect the suitability of taking on more debt?
