Ranbaxy Ltd. has been earning handsome profits since last 15 years. Company enjoy fair goodwill in...

  

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"Ranbaxy Ltd. has been earning handsome profits since last 15 years. Company enjoy fair goodwill in the market, so company can easily arrange debt as well as equity from the market, whenever needed. Therefore company decided to declare dividend with a hike of 15 % from last year. Which two components affecting dividend decision have been highlighted in the above paragraph. Jai Bharat Company Ltd is an auto part supplier company in Guru Gram, Haryana. Its business is spread over several cities. The CEO of company wants to open a factory in Gujarat near Tata Motors Ltd. but due to recession for the last two years, its business is facing slow down. Company needs capital. Rakesh Gupta is CA and financial advisor of the company. He opines that during recession profit falls and investors prefer to invest in debentures to earn fixed income. Therefore, the company should issue debentures. In this paragraph, which factor affecting financing decision has been highlighted? Explain state of capital market? "Ranbaxy Ltd. has been earning handsome profits since last 15 years. Company enjoy fair goodwill in the market, so company can easily arrange debt as well as equity from the market, whenever needed. Therefore company decided to declare dividend with a hike of 15 % from last year. Which two components affecting dividend decision have been highlighted in the above paragraph. Jai Bharat Company Ltd is an auto part supplier company in Guru Gram, Haryana. Its business is spread over several cities. The CEO of company wants to open a factory in Gujarat near Tata Motors Ltd. but due to recession for the last two years, its business is facing slow down. Company needs capital. Rakesh Gupta is CA and financial advisor of the company. He opines that during recession profit falls and investors prefer to invest in debentures to earn fixed income. Therefore, the company should issue debentures. In this paragraph, which factor affecting financing decision has been highlighted? Explain state of capital market?

Answer rating: 100% (QA)

i Stability of earning Earnings stability is a measure of how consistently those ea... View the full answer