Theory refresher - financing strategies - Part 1 - Sources of Finance and Dividend Policy
Taught by Stuart Murphy · AI tutor support included
You’ll learn how to evaluate sources of finance and dividend policy for a financing strategy decision, with a focus on debt versus equity, gearing, interest cover, cash availability and debt-servicing capacity.
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In this lesson
- 0:00 Financing Strategy Core Activity
- 0:38 Sources Of Finance
- 1:26 Choosing Debt Or Equity
- 4:44 Assessing Financing Capacity
- 7:30 Dividend Policy Decisions
- 8:23 Dividend Signalling And Investor Clientele
- 12:38 Residual And Stable Dividend Policies
- 14:21 Evaluating Dividend Policy Options
About this lesson
The lesson applies these measures to an exam-style scenario, including stress testing the impact of higher finance costs and assessing how financing choices signal information to the market. You’ll also learn how to analyse dividend policy using investor clientele, signalling, residual dividends, dividend stability and share buybacks. This Core activity refresher is designed to help you structure recommendations in a case study or related question, particularly when deciding whether a business should maintain its dividend or retain profits to fund future investment.
Duration: 16m
Transcript
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