Skip to main contentSkip to solution

Dividend decision is affected by many factors. Identify the factors affecting dividend decisions.

(a) State of Capital market

(b) Control Consideration

(c) Shareholder's Preference

(d) Taxation Policy

(e) Floatation Cost

Choose the most appropriate answer from the options given below :

Solution

Correct Option: 2

Per NCERT, factors affecting the dividend decision include shareholders' preference, taxation policy, stock market reaction, cash flow, stability of earnings, access to capital market, legal and contractual constraints. Control consideration and floatation cost primarily affect financing decisions, not dividend decisions. Among the given options, (c) shareholder's preference and (d) taxation policy are clear dividend factors.

Keyboard Shortcuts

  • Left arrow: Previous question
  • Right arrow: Next question
  • S key: Jump to solution
  • Q key: Jump to question