Question

Tata international Ltd. Earned a net profit of Rs. 50 crores. Ankit, the finance manager of Tata International Ltd. Wants to decide how to appropriate these profits. Identify the decision That Ankit will have to take and also dicsuss any five factors which help him in taking this decision.

Answer 1

Divdend decision
Factors affecting dividend decision: ( any five)
(i) Amount of earnings
(ii)Stability of earnings
(iii) Stability of dividend
(iv) Growth opportunities
(v) Cash flow position
(vi) Sharesholders preference
(vii) Taxation policy
(viii) Stock market reaction
(ix) Access to capital market
(x) Legal constraints
(xi) Constractual constraints.