Factors Affecting Dividend Policy

A number of considerations affect the dividend policy of company. The major factors are

1. Stability of Earnings. 2. Age of corporation. 3. Liquidity of Funds. 4. Extent of share Distribution. 5. Needs for Additional Capital. 6. Trade Cycles.  7. Government Policies.  8. Taxation Policy. 9. Legal Requirements. 10. Past dividend Rates.  11. Ability to Borrow. 12. Policy of Control. 13. Repayments of Loan. 14. Time for Payment of Dividend. 15. Regularity and stability in Dividend Payment.

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