Sarah Ltd.' is a company manufacturing cotton yarn. It has been consistently earning good profits for many years. This year too, it has been able to generate enough profits. There is availability of enough cash in the company and good prospects for growth in future. It is a well managed organisation and believes in quality, equal employment opportunities and good remuneration practices. It has many sharesholders who prefer to receive a regular income from their investments.
It has taken a loan of Rs. 40 lakhs from IDBI and is bound by certain restrictions on the payment of divided according to the terms of loan agreement.
the above discussion about the company leads to various factors which decide how much of the profits should be retained and how much has to be distributed by the company.
Quoting the lines from the above discussion identify and explain any four such factors.