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Examine the factors that affect a firm’s dividend policy. Can it be said that there is a ‘best’ approach when setting dividends?

Introduction
 Dividend pertains on the part of the profits of the firm that are to be distributed towards the shareholders in the firm (Periasamy 2009).Thus, dividend policy is considered as one of the financing decisions of firm. Preferably, a代写英国留学生企业财务管理毕业论文 firm must have either a policy towards its distribution processes or a policy towards the retention processes. With this, it can help the possible investors to have ideas regarding the different insinuations of investing in that particular firm (Ogilvie 1999). It is important to consider that dividend policy is vital to the firm; however, its process is complex. It is unpredictable because those shareholders who liked what they have received from the past cannot be sure to like the same one the next time. When the shareholders did not received what they want and need, they commonly express their discontentment through selling their stock. Therefore, proper planning of dividend policy is vital in order to avoid any disagreeable instances for the participants in the market, at the same time, defend the market (Gallagher & Andrew 2007).
 However, there are different factors which affect the process of setting dividend policy. Different studies of dividend policy and the factors affecting it are considered as appealing but complex matter (Nobes 1992). In spite of the long time of study, researches and literatures do not wholly comprehend the factors that affect the dividend policy, and how these factors connects or relates with each other (Bhattacharyya 2007). As a result, different approaches are being used in order to set the dividend policy.
 This paper will tackle issues that are related with the different factors which affect the process of setting the dividend policies, at the same time, embark upon the different approaches used in order to set dividends and find out if there is a best approach in setting dividends.

What is Dividend Policy?
 Weston & Brighan defined dividend policy as the one which settles on the division of pay to stockholders and retained revenues (cited from Palanivelu 2007, p. 414). Thus, the dividend policy of a firm pertains on its options make regarding paying the stockholders a cash dividend, the amount of the cash dividend and how often it should be disseminated. In much broader sense, it help to focus on the decisions if the firm will disseminated cash towards the investors through share repurchases or by particularly designated dividends, or by regular dividends and if the firm will rely towards its share or on the distribution of cash (Megginson & Smart 2008).

Factors Affecting Dividend Policy
 In deciding about the dividend policy, it includes all parts of payout including the rate of dividend, stability, method and time of the payments, etc (Banjerjee 2005). With this, it is vital to focus on the different factors or aspects which affect the financing decision of the firm. It is important to focus on the factors which affect the wellbeing of the stockholders and the factors affecting the wellbeing of the owners. Thus, it is vital to focus on the different external and internal factors that must be considered in order to plan and implement appropriate dividend policy.

References

Banjerjee, B 2005, Financial Policy and Management Accounting, 本论文由英语论文网提供整理，提供论文代写，英语论文代写，代写论文，代写英语论文，代写留学生论文，代写英文论文，留学生论文代写相关核心关键词搜索。