Financial Management: Dividend Policy and Investment Evaluation

Financial Management

Contents
INTRODUCTION...........................................................................................................................................3
MAIN BODY.................................................................................................................................................3
Question 1...................................................................................................................................................3
1. Size of the annual dividend which return to its shareholders..............................................................3
2. Practical issues that need to consider at the time of deciding size of dividend payment....................5
3. Calculate the three options.................................................................................................................6
4. Critically evaluate how companies make their decisions which affects the investment opportunities
.................................................................................................................................................................8
QUESTION 3.................................................................................................................................................9
Description of all the investment appraisal techniques...........................................................................9
Critical evaluation of benefits and limitations of all the investment appraisal techniques...................13
CONCLUSION.............................................................................................................................................14
REFERENCES..............................................................................................................................................15

INTRODUCTION
Financial management is an important part of monetary and non - monetary operations,
leading to a financially viable decision on the better solutions and use of financial services. The
topic of Financial Reporting was indeed a component of accounting with conventional methods
in the ancient times. Mostly with impact of industrial development it has since been extended for
days with inventive and multidisciplinary features in the area of employment (Accornero and
et.al, 2017). This has become a crucial part of the company worry and those who focus further in
the financial planning area. This also established in the fields of organizational finance, business
finance, financial economic theory, economic arithmetic and investment banking. The research
focuses on two different dividend policy subjects and investment evaluation approaches that
managers use to define greatest-favorable investment proposal. Such principles help companies
make strategic investment choices, and also what actions they need to take to increase its market
share.
MAIN BODY
Question 1
1. Size of the annual dividend which return to its shareholders
A dividend is a nominal compensation distributed to investors for their capital expenditure
in the capital of a company, and is originally removed from net profitability of the business.
Whereas the bulk of the profit margins are decided to keep inside the corporation as capital gains
– which embody the cash to use for the existing and potential business operations – the
remaining portion can be assigned as dividends to investors. Industries will also make investment
returns at occasions even since they don't make appropriate income. They can do so to maintain
their long history of making daily dividend payouts. Adviser have such an authority to follow
that amount of revenue, and while they cannot confess to its accounting purpose. If the employer
needs revenue then either the corporation can sustain the complete percentage of the benefits
with or without investing in the stock market (Arifin, 2017). Furthermore, in case the overall
revenues are projected to be in the form of which all or reserve, no distribution is recorded.