"Ranbaxy Ltd. has been earning handsome profits since last 15 years. Company enjoy fair goodwill in the market, so company can easily arrange debt as well as equity from the market, whenever needed. Therefore company decided to declare dividend with a hike of 15 % from last year.
Which two components affecting dividend decision have been highlighted in the above paragraph.

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Solution

(i) Stability of earning
(ii) Access to capital markets

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(i) Stability of earning(ii) Access to capital markets

(i) Stability of earning
(ii) Access to capital markets