The Board of Directors of a listed company is considering the company's dividend/retentions policy.

The high inflation rate does not need to be considered when determining the dividend policy.

Consideration should be given to the fact that shareholders will have a desire for real growth in dividend.

Retained earnings for reinvestment will have to earn a return in excess of the inflation level.

The impact of inflation on the cash flows should be considered when formulating the dividend policy. 

In periods of high inflation 100% of earnings should always be paid out as dividends so that shareholders can protect their wealth against the impact of inflation.