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If you were a CFO considering implementation of a dividend payout policy, which factors would influence your implementation plan?


If you were a CFO considering implementation of a dividend payout policy, which factors would influence your implementation plan?

Step 1

Dividend payout policy: An organization's dividend policy manages the measure of dividends paid out by the organization to its investors and the recurrence with which the dividends are paid out.

Step 2

The factors that influence dividend payout policy is as follows:

Profitability: The gainfulness of a firm is reflected in net profit proportion and proportion of profit to add up to assets. A very gainful organization has ability to pays higher dividends and an organization with lower profits will embrace a dividend policy.

Step 3

Proprietorship structure: The proprietorship structure of an organization additionally impacts the strategy. An organization with a higher promoter’s possessions ...

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