this video explains the various external factors which affect the dividend policy of a joint stock company such as following:
1) Inflation
2) Legal requirements
a)dividend can only be paid out of profit and not out of capital
b) the company can declare and pay dividend out of past years’ profit
c)at least 10% of profit must be transferred to reserve
d)dividend is payable in cash. But it can issue bonus shares by capitalizing reserves
3) Corporate tax( heavy rate of taxation reduce the residual profit)
4) General state of economy(certain or uncertain)
5) Conditions in the capital market
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