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Statement: A target for a minimum level of dividend cover is a target for a minimum dividend payout.
Why is the above statement incorrect ?
Statement: capital market securities are assets for the seller but liabilities for the buyer.
Why is the above statement incorrect ?
Dividend cover is earnings per share / dividend per share. Therefore if earnings are very low and there is a target dividend cover then dividend can be very low.
Dividend payout is the actual amount of the dividend.Capital market securities are such things as bonds/debentures and are issued by companies to raise money. The seller is the company, and they are boring money so it is a liability for them. The buyers are owed money from the company and so it is an asset for them.
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