Abstract:
The case revolves around Nasir Mahmood, the Finance Director of National Industries Limited. His dilemma was how to react to stock market and shareholder expectations for a high dividend, when the company itself required liquidity. The immediate issue was whether National should issue a non-cash dividend as opposed to a cash dividend, and what factors should be considered in deciding payment of dividends. The class discussion should lead to an exploration of different types of dividends, and factors that a company should examine before paying a dividend.