Summary of Factors Influencing Dividend Policy

In earlier sections, we described both the major theories of investor preference and some issues concerning the effects of dividend policy on the value of a firm. We also discussed the residual dividend model for setting a firm's long-run target payout ratio. In this section, we discuss several other factors that affect the dividend decision. These factors may be grouped into four broad categories: (1) constraints on dividend payments, (2) investment opportunities, (3) availability and cost of alternative sources of capital, and (4) effects of dividend policy on rs. Each of these categories has several subparts, which we discuss in the following paragraphs.

Debt Consolidation Advice

Debt Consolidation Advice

This eBook will tell you the facts about Debt Consolidation and allow you to make an educated decision if you are considering consolidating your debts.

Get My Free Ebook

Post a comment