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Finance - Coggle Diagram
Finance
Dividend Policy
Distribution Profits
Kept within Business (re-invest)
Examples of Dividend Policy
Constant Dividend
Downside ( not keeps up with inflation or above)
Constant Proportion of Earnings
Inflation linked Dividend
Pay whats left after required investments
Note: DIVIDEND Irrelevancy Theory (Miller and Madigliany)
SIGNALLING EFFECT - Market Response to Policy
Market
Non-Financial Objectives
Growth
R&D
Service Improvement
Quality Improvement
Financing (Raising Capital)
Bonds
Equity
Banks
Financial Objectives
Maximise Shareholder Wealth
Share Price Growth + Dividend Paid
Maximise Profit (Can be manipulated)
Earnings Per Share
Profit after TAX - Preferential Share dividend (e.g. distributed profits) / No of Ordinary Shares
Financial Strategy
Short-Term
Invest (Too Much Cash) A return on that cash
Long-Term
New Business Projects or Products
Corporate Strategy
New Markets
Existing Markets
Operational Strategy
Functional Areas
Business Units
Stakeholders
Internal
Management
Employees
External
Customers
Suppliers
Banks
Investors
Community
Government (Legislation and Taxation)
Conflicting Objectives
Agency Problem
Shareholders (Business Owners)
Long-term Health and Returns
Management (Are Employees of Shareholders)
Short-Term Pay and Bonus
Solutions - Goal Congruence)
Share Options
Deferred Shares
Profits V Community
Business Strategy (Unit Level)
Competitive Position
Financial Strategy
