According to you, which company is in a position to declare high dividends?
Shareholder's preference
Stable earnings
Access to capital market
Taxation policy
A company having stable earnings can declare high dividends.
What is meant by dividend policy decision ? Explain the following four factors which affect the dividend decision of a company.
(i) Legal constraints (ii) Stability of earnings (iii) Access to capital markets (iv) Taxation policy
Payment of fixed rate of dividend to preference shares may enable a company to declare higher rates of dividend for the equity shareholders in good times.
___ is the riskless source of finance, as there is no obligation on the company to pay dividends or repay the capital of the shareholders, whether they earn a profit or not.