How to Evaluate each alternative(I.e pay dividend or repurchase the shares) by 1. Calculating the number of shares in issue 2 The dividend per share (for the first alternative I.e pay the dividend)

1.Dividend income plays an important role when comparing stock prices of individual companies and the market as a whole.

If the ratio of the dividend to the value of a share becomes less than a certain value, then the shares are considered overvalued, i.e., this value becomes less than the profitability of alternative capital investment options and makes the shares unattractive to investors.

2.The company's decision to pay dividends and their size play an important role in the investors' assessment of the feasibility of investing in the company's shares, since the company's ability to pay dividends indicates its financial condition.

The increased attention to various aspects of dividend policy is due to the following reasons.

First, dividend policy has an impact on relations with investors (shareholders). Shareholders have a negative attitude towards companies that cut dividends, because they associate such a cut with the company's financial difficulties and may sell their shares, affecting the decrease in their market price.

Second, the dividend policy affects the financial program and capital budget of the company.

Third, dividend policy affects cash flow. For example, a company with low liquidity may be forced to limit the payment of dividends to shareholders.

Fourthly, the dividend policy reduces equity capital, as dividends are paid from retained earnings. As a result, this leads to an increase in the ratio of debt and equity capital.