Enumerate four ways in which the dividend decision affects the wealth maximization goal of a company quoted in the securities exchange of your country.

      

Enumerate four ways in which the dividend decision affects the wealth maximization goal of a company quoted in the securities exchange of your country.

  

Answers


Kavungya
i. High retention enhances future growth and value of the company
ii. High dividend increases the value of the shares and the company as a whole
iii. High retention reduces the firms gearing leading to decrease in cost of capital and an increase in the value of the company.
iv. Retained earnings is a cheap source of funds which end up increase the NPV of the projects undertaken and the value of the firm as a whole
Kavungya answered the question on May 5, 2022 at 13:41


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