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GWW Co

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FM Exams › GWW Co

Viewing 2 posts - 1 through 2 (of 2 total)
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  • August 30, 2017 at 11:53 am #404361
    khuramch
    Member
    • Topics: 41
    • Replies: 29
    • ☆☆

    Hi sir hope you are fine..

    I am confused in one question..

    Q;Which of the following could explain GWW Co,s decision to pay no dividends?

    1;Lack of cash
    2;Birds in hand theory

    Well i think the correct ans in B because Birds in hand theory also suggest that there is no effect on shareholders wealth if pay or no pay the dividends but its wrong

    Actually the right ans is 1..Well yes its the one reason of not paying the Dividend..but maybe company overcome this reason by Script Dividends..

    While Statement 2 is specifically related to no payment f dividends..

    Then Why statement 2 is wrong…What do you think??

    August 30, 2017 at 4:06 pm #404403
    John Moffat
    Keymaster
    • Topics: 57
    • Replies: 54684
    • ☆☆☆☆☆

    The bird in hand theory is not a reason for the company not to pay dividends (it is simply a theory that suggests that shareholders should not be worried if there is no dividend).

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