Pls answer this question Q no 28 pls
Dear student,
Following are the factors that affects dividend decision:
1) Growth prospects- 'Good prospects for growth in the future.'
If a company has a number of investment plans then it should be invest the earnings of the company. As to invest in investment projects, company has two options: one to raise additional capital or invest its retained earnings. If our company has good growth opportunities, it pays out less dividend.
2) Preference of shareholders- 'It has many shareholders who prefer to receive regular income from their investments.'
Another important factor affecting dividend policy is expectation and preference of shareholders as their expectations cannot be ignored by the company. Hence, shareholder's preference is kept in mind by the management before declaring dividends.
3) Contractual constraints- 'It has taken a loan of Rs. 20 lakhs from SBI bank and is bound by certain restrictions on the payment of dividend according to the terms of the loan agreement.'
When companies take long term loan then financier may put some restrictions or constraints on distribution of dividend and companies have to abide by these constraints.
4) Stability of earnings- 'It has been consistently earning good profits for many years.'
Companies having stable or smooth earnings prefer to give high rate of dividend whereas companies with unstable earnings preferred to give low rate of earnings.
PACKAGING:
Packaging is the basic activity of every company it can be defined as 'A set of tasks or activities which are concerned with the designing, production of an appropriate wrapper, container or bag for the product.'
Importance of packaging:
1) Rising standard of health and sanitation- Packing has become essential because of rising standard of health and sanitation. In a packed good there are less chances of contamination of products. People prefer packed products over loose as there are less chances of adulteration in packed product.
2) Self Service outlets- The self services outlets are becoming very popular. In these stores generally products with attractive packing are picked by buyers more quickly.
3) Product Differentiation- Packinghelp the customers to differentiate between goods on the basis of quality as with the type of packing customer can guess about the quality of goods.
Levels of packaging:
There are three levels of Packaging:
1) Primary Package- It refers the immediate packing of product. It remains with product till it is used for example, tube of paste, Matchbox etc.
2) Secondary Package- These are additional packings which give more protection. Generally consumers so that when they start using the product for example, cardboard box used to keep toothpaste. People true box when start using paste.
3) Transportation Packaging- These are packagings used for storing for transporting the goods. This packing gives protection to goods, for example, corrugated boxes used to shift ruffle lays, kurkure, etc.
Regards
Following are the factors that affects dividend decision:
1) Growth prospects- 'Good prospects for growth in the future.'
If a company has a number of investment plans then it should be invest the earnings of the company. As to invest in investment projects, company has two options: one to raise additional capital or invest its retained earnings. If our company has good growth opportunities, it pays out less dividend.
2) Preference of shareholders- 'It has many shareholders who prefer to receive regular income from their investments.'
Another important factor affecting dividend policy is expectation and preference of shareholders as their expectations cannot be ignored by the company. Hence, shareholder's preference is kept in mind by the management before declaring dividends.
3) Contractual constraints- 'It has taken a loan of Rs. 20 lakhs from SBI bank and is bound by certain restrictions on the payment of dividend according to the terms of the loan agreement.'
When companies take long term loan then financier may put some restrictions or constraints on distribution of dividend and companies have to abide by these constraints.
4) Stability of earnings- 'It has been consistently earning good profits for many years.'
Companies having stable or smooth earnings prefer to give high rate of dividend whereas companies with unstable earnings preferred to give low rate of earnings.
PACKAGING:
Packaging is the basic activity of every company it can be defined as 'A set of tasks or activities which are concerned with the designing, production of an appropriate wrapper, container or bag for the product.'
Importance of packaging:
1) Rising standard of health and sanitation- Packing has become essential because of rising standard of health and sanitation. In a packed good there are less chances of contamination of products. People prefer packed products over loose as there are less chances of adulteration in packed product.
2) Self Service outlets- The self services outlets are becoming very popular. In these stores generally products with attractive packing are picked by buyers more quickly.
3) Product Differentiation- Packinghelp the customers to differentiate between goods on the basis of quality as with the type of packing customer can guess about the quality of goods.
Levels of packaging:
There are three levels of Packaging:
1) Primary Package- It refers the immediate packing of product. It remains with product till it is used for example, tube of paste, Matchbox etc.
2) Secondary Package- These are additional packings which give more protection. Generally consumers so that when they start using the product for example, cardboard box used to keep toothpaste. People true box when start using paste.
3) Transportation Packaging- These are packagings used for storing for transporting the goods. This packing gives protection to goods, for example, corrugated boxes used to shift ruffle lays, kurkure, etc.
Regards