Role of Corporate Finance Managers in Determining the Optimum Dividend Policy
The choice of a policy of dividend distribution must be based on facts and not arbitrary, therefore, the Corporate Finance Managers must consider several factors before deciding on going out dividends.
The constraints faced by the leaders in developing the dividend policy Business leaders must ensure a margin of safety between the actual distribution policy adopted and they could theoretically be considered. Being at the limit of its possibilities in the distribution requires the company in case of difficulty either:
• Temporarily suspend any distribution in which case it shall bear all the consequences that such an operation has generally on the market price.
• Maintain and collect the dividend income streams the company. The fact of distribution unless it is could allow the otherwise avoid reaching such extreme situations. Other factors may also influence the setting of amount of the annual dividend (Sullivan 2003, p. 273).