Turnitin and Waypoint are being used to check for plagiarism and Please use APA format. Please pay close attention to plagiarism, and it's not tolerated. Capital Budgeting and Dividend Policy We...

Discussion
Capital Budgeting
Capital budgeting can be said as the process in which a business has to decide whether to project that requires the investment is worth investing or not. For this the company has to access its cash flows, which will help in determining whether the project will generate sufficient cash flows and give adequate returns to the company or not. One of the things that needs to be considered is the required rate of return and its weighted average cost of capital. It is important for the company to analyze its cash flows to see that the project is beneficial or not. It is not always important for the firm to select the project which has highest rate of return, it is important to understand all the quantitative as well as qualitative factors to decide on the project. Some of the quantitative factors includes payback period, net present value and return. Some qualitative factors includes the morale of the employees.
Dividends are considered to be one of the biggest incentives to keep investors happy. With the dividends paid by the company, the company’s stock are expected to grow. With the dividends, the stock of the company also attracts the investors to purchase the stock. Apart from this, when the company pays consistent dividends, it means that the company is doing well and there is a potential for growth for the...