What are the alternatives and factors that you may consider before finalizing your views on dividend policy?

Question

accounting and finance for managers

Answer 1

Bowlers set up emphatic win for SA

Answer 2

Factors that need to be considered:

Is this a private company or a publicly traded corporation?

If it is a publicly traded company will a dividend enhance the value of the outstanding shares?

Will this be a one time only dividend or an annual dividend?

Will you try to maintain a level dividend from year to year?

Or will you try to raise the dividend, perhaps annually?

Can the present and anticipated future cash flow support dividends?

The alternative to a dividend would be to buy back outstanding shares of the company in order to enhance the P/E ratio and therefore the stock valuation.