Q: 17
The Board of Directors of a small listed company engaged in exploration are currently considering the
future dividend policy of the company. Exploration is considered a high-risk business and
consequently the company has a low level of debt finance.
Forecasts indicate a period of profit fluctuation in the next few years as the company is planning to
embark on a major capital investment project. Debt finance is unlikely to be available due to the
project's high business risk.
Which THREE of the following are practical considerations when determining the company's
dividend/retention policy?
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