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Dividend Payout Ratio
Dividend Payout Ratio
Dividend Payout Ratio
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Dividend Payout Ratio

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dividend payout ratio by jim

dividend payout ratio by jim

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  • 1. FUNDS REQUIREMENT: It’s a key factor influencing the payout ratio of a firm is its requirement of funds in the foreseeable in future. LIQUIDITY: Dividends entail cash payment. Hence, liquidity of the firm has a bearing on its dividend decision.
  • 2.
    • ACCESS TO EXTERNAL SOURCES OF FINANCING
    • Firms which has easy access to external sources of financing may feel less constrained in its dividend decision.
    • SHAREHOLDER PREFERENCE:
    • The preference of shareholders may influence the dividend payout ratio of the firm.
  • 3.
    • The cost difference between external equity and retained earnings has effect on external equity and retained earnings used by the firm.
    • CONTROL:
    • The new shareholders will have to share their control over the existing shareholders.
    • TAXES:
    • From 97-98 onwards dividends in the hands of individual shareholders have been exempted from tax.

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