VK Ltd. is a fast-moving consumer goods company. It has shareholders spread all over India. Most of its shareholders depend upon a regular income from their investment. VK Ltd. has been earning consistent profits. The management of the company keeps in mind the preference of the shareholders regarding the payment of dividends. Since its shareholders, in general, desire that at least a certain amount is paid as a dividend to them every year, the company declares a dividend every year. Atul, the Finance Manager of the company identified promising growth opportunities. He suggested to the Chief Executive Officer to retain the earnings to finance the required investments instead of declaring a dividend every year. For this, the Chief Executive Officer decided to call a General Body Meeting of the shareholders.
(i) Identify two factors affecting the dividend decision discussed above.
(ii) State two other factors that affect the dividend decision of a company.