CHAPTER 13 DIVIDEND POLICY L E A R N I N G LG1 LG2 LG3 Understand cash dividend payment procedures and the role of dividend reinvestment plans. Describe the residual theory of dividends and the key arguments with regard to dividend irrelevance and relevance. Discuss the key factors involved in formulating a dividend policy. G O A L S LG4 Review and evaluate the three basic types of dividend policies. LG5 Evaluate stock dividends from accounting‚ shareholder
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University of Sydney 1 Dividend Policy 2 This Lecture PART I – Dividend Fundamentals • • • • What is Dividend Policy? Institutional Features of Dividends Types of Dividend Policies Trends in Dividend Policies PART 2 – Is There An Optimal Dividend Policy? • Dividend Policy is Irrelevant • Dividend Policy is Relevant PART 3 – Alternatives to Dividends • Share Buy-Backs • Dividend Reinvestment Plans (DRPs) 3 What is Dividend Policy? Definition • Dividend policy refers to the decision
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Dividend Policy Dividend policy Executive summary Once a company makes a profit‚ they must decide on what to do with those profits. They could continue to retain the profits within the company‚ or they could pay out the profits to the owners of the firm in the form of dividends. Once the company decides on whether to pay dividends‚ they may establish a somewhat permanent dividend policy‚ which may in turn affect investors and perceptions of the company in the financial
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Effects of Dividends on Stock Prices in Nepal Rabindra Joshi* Abstract This paper examines the impact of dividends on stock price in the context of Nepal. A majority of earlier studies conducted in developed countries show that dividend has a strong effect than retained earnings. The study examines whether this is consistent in the context of Nepal (or not) and the implication particularly to the banking and non-banking sector. To achieve the objective of the study‚ a descriptive and analytical research
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Dividend Policy: Clientele Effects and Signalling Model Literature Review Sharon Theresia 17132233 Corporate Finance 307 Singapore Campus Abstract Two of the most influential dividend policies are being reviewed and compared. in this paper‚ clientele effects and signalling model are two chosen policies. Findings implied that clientele is shaped by tax preferences of shareholders which in the end will determine companies’ ideal dividend policies. It is also believed that amount of paid dividend
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An Empirical Analysis of Dividend Payout Policy Indian Corporate ABSTRACT In the present paper an attempt has been made to assess the dividend payout policies of Indian Companies. For the purpose of study BSE Sensex -30 companies have been selected as sample for the study. To study impact of profitability‚ liquidity and size of business on dividend payout regression analysis were carried out. An attempt has also been made to calculate estimated dividend payout based on regression results
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Running head: WOULD YOU RECOMMEND A FRIEND TO OUR HOSPITAL? 1 David M. Dowling Operations Management I Southwestern College 20 January 2011 Week 3 – The Culture & Quality at Arnold Palmer Hospital Running head: WOULD YOU RECOMMENT A FRIEND TO OUR HOSPITAL? 2 Abstract In this paper I will demonstrate the importance of instilling a culture
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University of Hong Kong Dividend Policy Bank distributed a $6.30 dividend per share in 2008. If you purchased shares in Hang Seng Bank at $87 per share‚ the company’s dividend yield was 7.2% ($6.30/$87) which is much higher than the bank deposit rate. Dividend payout ratio is another important indicator: Dividend payout ratio = Dividend per share ÷ Earnings per share Dividend policy is the policy used by a company to decide how much it will pay out to shareholders in dividends. In your financial
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DIVIDEND POLICY * Under dividend policy you should be ale to explain the following: * Dividend and types of dividend * Dividend policies and factors that affect dividend policy * Theories of dividend policy * It is a proportion of annual accounting profit or accumulated profit paid out to shareholders either in the form of cash or shares. * Dividend is recommended by the Board of directors for the approval of shareholders at Annual General Meeting (AGM). Shareholders can
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management must decide on the form of the dividend distribution‚ generally as cash dividends or via a share buyback. Various factors may be taken into consideration: where shareholders must pay tax on dividends‚ firms may elect to retain earnings or to perform a stock buyback‚ in both cases increasing the value of shares outstanding. Alternatively‚ some companies will pay "dividends" from stock rather than in cash. The purpose of an optimal dividend policy should be to maximize shareholders’ wealth
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