• Modigliani-Miller Theorem
    Chapter 1: The Modigliani-Miller Propositions, Taxes and Bankruptcy Costs Corporate Finance - MSc in Finance (BGSE) Albert Banal-Estañol Universitat Pompeu Fabra and Barcelona GSE January 2010 Albert Banal-Estañol (UPF and BGSE) Chapter 1 10/01 1 / 36 Corporate Finance - MSc in...
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  • Dividend Irrelevance Theory
    Dividend irrelevance theoryRelevance or irrelevance of retention for dividend policy irrelevance Carlo Alberto Magni Department of Economics, University of Modena and Reggio Emilia viale Berengario 51, 41100 Modena, Italy Email: magni@unimo.it Abstract. In an interesting recent paper, DeAngelo and...
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  • Dividend Policy Theories
    theories regarding the relevance of dividend policy-discuss these theories. In what situations might management decide to increase dividends? Dividend Irrelevance Theory Much like their work on the capital-structure irrelevance proposition, Modigliani and Miller also theorized that, with no taxes...
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  • Nhan Nai
    The Modigliani-Miller Theorem The New Palgrave Dictionary of Economics Anne P. Villamil, University of Illinois The Modigliani-Miller Theorem is a cornerstone of modern corporate finance. At its heart, the theorem is an irrelevance proposition: The Modigliani-Miller Theorem provides conditions under...
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  • Rationale for Dividends
    3/28/2010 Introduction Dividends refer to that portion of a firm’s net earnings which are paid out to the shareholders. Our focus here is on dividends paid to the ordinary shareholders because holders of the preference shares are entitled to a stipulated rate of dividend. Moreover, the discussion...
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  • Business Finance
    the Revolution Forty years ago, the Modigliani-Miller propositions started a new era in corporate finance. How does M&M hold up today? Dun Gifford Jr., CFO Magazine July 01, 1998   I have a simple explanation [for the first Modigliani-Miller proposition]. It's after the ball game, and the pizza...
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  • Financial Analysis
    distress and even to bankruptcy. The capital structure decision is at the center of many other decisions in the area of corporate finance. These include dividend policy, project financing, issue of long term securities, financing of mergers, buyouts and so on. One of the many objectives of a corporate financial...
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  • Midigliani Miller Theorem
    ModiglianiMiller theorem From Wikipedia, the free encyclopedia The ModiglianiMiller theorem (of Franco Modigliani, Merton Miller) forms the basis for modern thinking on capital structure. The basic theorem states that, under a certain market price process (the classical random walk), in the absence...
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  • Dividend Policy
    Dividend policy Dividend policy is concerned with taking a decision regarding paying cash dividend in the present or paying an increased dividend at a later stage. The firm could also pay in the form of stock dividends which unlike cash dividends do not provide liquidity to the investors, however, it...
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  • Brealey. Myers. Allen
    Firms can pay out cash to their shareholders in the following ways: (I) Dividends (II) Share repurchases (III) Interest payments A) I only B) II only C) III only D) I and II only Answer: D Type: Easy Page: 415 2. Dividends are decided by: (I) The managers of a firm (II) The government (III) The board...
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  • Dividend Policy Irrelevance
    The Modigliani-Miller Propositions After Thirty Years Merton H. Miller The Journal of Economic Perspectives, Vol. 2, No. 4. (Autumn, 1988), pp. 99-120. Stable URL: http://links.jstor.org/sici?sici=0895-3309%28198823%292%3A4%3C99%3ATMPATY%3E2.0.CO%3B2-V The Journal of Economic Perspectives is currently...
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  • Dividend Irrrelevance Theory
    Dividend Irrelevance Theory definition A theory that investors are not concerned with a company's dividend policy since they can sell a portion of their portfolio of equities if they want cash. The dividend irrelevance theory essentially indicates that an issuance of dividends should have little...
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  • Theory of Corporate Finance
    inconsistencies and was almost totally prescriptive, that is, normatively oriented. The major concerns of the field were optimal investment, financing, and dividend policies, but little consideration was given to the effect on these policies of individual incentives, or to the nature of equilibrium in financial...
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  • No File
     Bird-in-the-Hand Theory The bird-in-the-hand theory, however, states that dividends are relevant. Remember that total return (k) is equal to dividend yield plus capital gains. Myron Gordon and John Lintner (Gordon/Litner) took this equation and assumed that k would decrease as a company's payout increased...
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  • dividend
    Dividend policy is concerned with financial policies regarding paying cash dividend in the present or paying an increased dividend at a later stage. Whether to issue dividends, and what amount, is determined mainly on the basis of the company's unappropriated profit (excess cash) and influenced by the...
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  • Finance
    A firm's capital structure is then the composition or 'structure' of its liabilities. b) Modigliani-Miller Capital Structure Theory The Modigliani-Miller theorem, proposed by Franco Modigliani and Merton Miller, forms the basis for modern thinking on capital structure, though it is generally viewed...
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  • Divident Irrelevance and the Clieniele Effect
    Dividend irrelevance and the clientele effect By Franco Azzopardi, MSc student University of Leicester, 2004 Page 1 of 19 Contents Page Introduction Background Types of dividend and policies Shareholders’ wealth Dividends as a Residual Arguments for dividend irrelevance Arguments for Dividend...
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  • Dividends and Shareholder Value
    Does Dividend Policy Enhance Shareholder Value? by Keisuke Nitta Financial Research Group nitta@nli-research.co.jp We approach dividend policy from the perspective of an interactive game between corporate managers and shareholders. While dividend policy in Japan has been extensively discussed in...
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  • Firm’s Dividend Policy
    Chapter 1 1.1 Introduction Dividend policy is the policy of a corporation that decide how much will be distributed to its shareholders in the form of dividends from its earnings, or how much will be kept for a further investment opportunity. When dividend decision made by the board of directors of...
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  • Theory of Capital Structure
    theoretical propositions. Miller (1988) I. Introduction The paper introduces the reader to two main theories of capital structure, which is the static trade-off theory, and the pecking-order theory. Underlying these theories are the assumptions of the irrelevance theorem of Miller and Modigliani. Since...
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