ORGANIZATIONAL STRUCTURE Definition

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ORGANIZATIONAL STRUCTURE is the delineation of responsibilities, authorities and relations organized in such a way as to enable an organization to perform its functions.

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RETURN ON NET WORTH see RETURN ON STOCKHOLDERS EQUITY.

POLITICAL COSTS HYPOTHESIS predicts that firms with low agency and political costs and effective shareholders monitoring will distribute cash dividend and those with moderate agency and political costs may use stock dividends in lieu of cash dividends to separate themselves from firms having high agency and political costs. This indicates that cash dividend firms will face better long-term stock market valuation of their shares than stock dividend firms.

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