CONTENTS
I-21 PAGE
STUDENTS ACTIVITIES
428
Points to remember
428
Graded illustrations
428
Objective type questions
434
Multiple choice questions
435
Assignments
436
Problems
437
14
CAPITAL STRUCTURE : PLANNING AND DESIGNING
u Pecking order theory
440
u Factors determining capital structure
440
u Profitability and capital structure : EBIT-EPS analysis
442
u Liquidity and capital structure : Cash flow analysis
443
u Project financing and project beta
446
u Unlevering and relevering beta
447
- Calculation of Project β or Division β
448
STUDENTS ACTIVITIES
450
Points to remember
450
Graded illustrations
451
Objective type questions
456
Multiple choice questions
457
Assignments
458
PART V : DIVIDEND DECISION 15
DIVIDEND DECISION AND VALUATION OF THE FIRM
u Relevance of Dividend Policy
462
u Irrelevance of Dividend Policy
465
STUDENTS ACTIVITIES
471
Points to remember
471
Graded illustrations
471
Objective type questions
478
Multiple choice questions
478
Assignments
479
Problems
480
16
DIVIDEND POLICY : DETERMINANTS AND CONSTRAINTS
u Stability of Dividends
485
u Legal and Procedural Considerations
487
u Clientele Effect
491
u The Dividend Puzzle
492
