Which of the following are factors in the optimal dividend payout ratio?
I. Investor's preference for dividends versus capital gains
II. The target capital structure
III. The investment opportunities available to the firm
IV. The cost and availability of external financing
V. Beta Coefficient -
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A. B. C. D. E. F.E
The optimal payout ratio of a firm represents the ideal amount of earnings that should be distributed to shareholders as dividends. This figure is comprised of four components, namely: the cost and availability of external financing, the investment opportunities available to the firm, the firm's target capital structure, and investor preferences. The Beta coefficient is not expressly incorporated into the determination of the Optimal Dividend Payout Ratio.