A publicly traded company decides whether or not to pay dividends to its shareholders and how much as dividends at the end of the financial year. Private companies also decide the amount to withdraw from the business or reinvest in the business. This is the dividend decision. Mullin plc has three types of dividend policies available to choose from. They include a constant payout ratio dividend policy, a regular dividend policy and a regular and extra low dividend policy. The constant payout ratio dividend policy refers to paying out a certain percentage of profits and distributing it to the owner in the form of cash. In this policy, Mullin plc will set a particular percentage on the earnings it receives in a financial period, for example 40% of earnings paid out as dividends. Since dividends are also considered indicators of corporate condition and stability, stock prices could suffer under this policy if earnings decline (Dhanani, Alpa 2005). A regular dividend policy refers to a policy that is based on a fixed dividend for each period. This policy will mean that Mullin plc will set a specific dividend amount, for example £5 per share. This policy helps to minimize uncertainties (Yadav, Tapesh 2012). Regular and extra low dividend policy refers to the policy that pays regular low dividends and an additional dividend when earnings are higher than normal in a given period. Mullin plc may also choose to pay dividends in the form of stock dividends and share buybacks. Stock dividend refers to the payment to existing shareholders in the form of shares. Share repurchase refers to the company's repurchase of its own shares. Mullins plc can achieve this through the open market, public offer and purchase by existing shareholders. (Le Fur, Yann, Maurizio Dallochio and Antonio Salvi, 2005) Mullin plc will have to establish policies consistent with its objectives. Numerous factors influence a company's dividend policy. They include “legal constraints, contractual constraints, internal constraints, module growth prospects, owner considerations and market considerations” (Baker, H. Kent, Gary Powell, 2009 p 469). Legal restrictions refer to restrictions placed on a company from paying dividends beyond a set legal limit. Additionally, if Mullins plc has overdue liabilities or becomes insolvent, it will not be able to pay dividends. Contractual constraints refer to the restrictions provided for in financing contracts. Internal constraints refer to the company's ability to pay dividends that may arise from the amount it holds in cash.