Location via proxy:   [ UP ]  
[Report a bug]   [Manage cookies]                

Is It Much Ado About Nothing

Download as docx, pdf, or txt
Download as docx, pdf, or txt
You are on page 1of 1

Is It Much Ado About Nothing?

Dividend Policy

I. Point of View

Edwin Rosewood, founder of New Wave Corporation, and currently the


President and Chief Executive Officer

II. Statement of the Problem

What financing scheme should Angelite Foods Corporation (AFC) should


undertake to satisfy its financial needs?

III. Objectives

a. To assess whether or not dividends will be paid


b. To measure how much dividend, and when should dividend be paid
c. To identify what dividend approach would be best suited for the company
d. To check if a dividend policy should announced and established

IV. Areas of consideration

a. Company’s income – A firm whose sales are relatively stable can safely take on
more debt and incur higher fixed charges than a company with unstable sales.
AFC should determine if the sales performance of the company can satisfy the
interest expenses they may incur if the undertake financial borrowing after
meeting its cost of sales and operating expenses, otherwise the results of the
company’s performance should be burden by the shareholders.
b. Firm’s objective of maximizing shareholder value
The company should strike a balance between current dividends and future
growth so as to maximize the firm’s stock price.
.

V. Alternative Courses of Action

a. Not issue a dividend

b. Issue dividend using one of the following approaches:

You might also like