Dividend distribution decisions are complicated and involve the understanding of critical strategic factors that affect the policy and value of a firm Thus, the management of any firm has to consider the constraints on dividend payments, the availability and cost of alternative sources of capital, and other external factors when they create and implement their distribution policy Based on your understanding of the constraints on dividend payments, identify the type of constraint this condition represents. Assume that all other factors are held constant The impairment of capital rule states that dividend payments cannot exceed the balance sheet item "retained earnings." Along with several constraints, several Internal factors within a company and external macroeconomic factors affect a firm's dividend policy. In the table, identify which factors, in general, tend to favor high or low payout ratios. Factor Favors a High Payout Favors a Low Payout A company recorded high retained earnings but has very little cash and other liquid assets. A closely held firm has a majority of its shareholders in high, marginal tax brackets A firm has an established credit line for access to external sources of funding When a firm has a large number of profitable investment opportunities, it will usually have a target payout ratio. earnings than it otherwise would to avoid diluting If management is concerned with keeping control of the company, it will be likely to retain control by issuing new stock to raise capital benep external factors when they create and implement their distribution policy. Based on your understanding of the constraints on dividend payments, identify the type of constraint this condition factors are held constant. The impairment of capital rule states that dividend payments cannot exceed the balance sheet item "retain Along with several constraints, several internal factors within a company and external macroeconomic factors affect In the table, identify which factors, in general, tend to favor high or low payout ratios. Factor Favors a High Pa A company recorded high retained earnings but has very little cash and other liquid assets. A closely held firm has a majority of its shareholders in high, marginal tax brackets. A firm has an established credit line for access to external sources of funding, When a firm has a large number of profitable investment opportunities, it will usually have a target payout high hings than it of If management is concerned with keeping control of the company, it will be likely to retain control by issuing new stock to raise capital. low ed on your understanding of the constraints on dividend payments, identify the type of constraint this condi ors are held constant. impairment of capital rule states that dividend payments cannot exceed the balance sheet item "re with several constraints, several internal factors within a company and external macroeconomic factors a e table, identify which factors, in general, tend to favor high or low payout ratios. etor Favors a High ompany recorded high retained earnings but has very little cash and other liquid assets. losely held firm has a majority of its shareho ets. ers in high, marginal tax br O rm has an established credit line for access to external sources of funding. less a firm has a large number of profitable investment opportunities, it will usually have target paya more earnings than nagement is concerned with keeping control of the company, it will be likely to retain ol by issuing new stock to raise capital. Dividend distribution decisions are complicated and involve the understanding of critical strategic factors that affect the policy and value of a firm Thus, the management of any firm has to consider the constraints on dividend payments, the availability and cost of alternative sources of capital, and other external factors when they create and implement their distribution policy Based on your understanding of the constraints on dividend payments, identify the type of constraint this condition represents. Assume that all other factors are held constant The impairment of capital rule states that dividend payments cannot exceed the balance sheet item "retained earnings." Along with several constraints, several Internal factors within a company and external macroeconomic factors affect a firm's dividend policy. In the table, identify which factors, in general, tend to favor high or low payout ratios. Factor Favors a High Payout Favors a Low Payout A company recorded high retained earnings but has very little cash and other liquid assets. A closely held firm has a majority of its shareholders in high, marginal tax brackets A firm has an established credit line for access to external sources of funding When a firm has a large number of profitable investment opportunities, it will usually have a target payout ratio. earnings than it otherwise would to avoid diluting If management is concerned with keeping control of the company, it will be likely to retain control by issuing new stock to raise capital benep external factors when they create and implement their distribution policy. Based on your understanding of the constraints on dividend payments, identify the type of constraint this condition factors are held constant. The impairment of capital rule states that dividend payments cannot exceed the balance sheet item "retain Along with several constraints, several internal factors within a company and external macroeconomic factors affect In the table, identify which factors, in general, tend to favor high or low payout ratios. Factor Favors a High Pa A company recorded high retained earnings but has very little cash and other liquid assets. A closely held firm has a majority of its shareholders in high, marginal tax brackets. A firm has an established credit line for access to external sources of funding, When a firm has a large number of profitable investment opportunities, it will usually have a target payout high hings than it of If management is concerned with keeping control of the company, it will be likely to retain control by issuing new stock to raise capital. low ed on your understanding of the constraints on dividend payments, identify the type of constraint this condi ors are held constant. impairment of capital rule states that dividend payments cannot exceed the balance sheet item "re with several constraints, several internal factors within a company and external macroeconomic factors a e table, identify which factors, in general, tend to favor high or low payout ratios. etor Favors a High ompany recorded high retained earnings but has very little cash and other liquid assets. losely held firm has a majority of its shareho ets. ers in high, marginal tax br O rm has an established credit line for access to external sources of funding. less a firm has a large number of profitable investment opportunities, it will usually have target paya more earnings than nagement is concerned with keeping control of the company, it will be likely to retain ol by issuing new stock to raise capital