CHECK THESE SAMPLES OF Capital Structure and Dividend Policy Theory
Discuss the Proposition that a Company's dividend policy is Irrelevant to its Market Value Dividend irrelevance theory basically signifies that an issuance of dividends must have little or no impact on stock price.... This theory is “A postulation that the dividend policy of a company should have minimal effect on the investment decisions made by an investor due to the fact that the payment or non-payment of a dividend will not necessarily impact the net return to the investor....
7 Pages
(1750 words)
Essay
For and Against the Irrelevance of dividend policy University dividend policy dividend policy is regarded as the clear or embedded decision of a corporation's Board of Directors with respect to the extent of available income which is supposed to be allocated among the shareholders of the corporation (Kimmel et al, 2010).... Arguments For Dividend Irrelevance In the year 1961, two senior professors, Franco Modigliani and Merton Miller (M&M) stated that a firm's value has no correlation with its dividend policy....
8 Pages
(2000 words)
Essay
The stock market is affected by the decisions made by managers in relation to changing the capital structure and payout policies of their organization.... Therefore, it is imperative to first identify the aspects affecting the capital structure and payout policies of the organization before signalling the respective parties or making any major decisions (Notes on Signalling 2005).... Managers face the basic responsibility of deciding on the amount to debt to be employed on the capital structure as well as determine the dividend percentages to be paid out (Barclay et al....
7 Pages
(1750 words)
Essay
A dividend policy would be framed for the shareholders in a way that it would set a target capital structure and it would estimate the annual equity needs of the company.... The dividend policy includes certain factors like: How frequent the company would pay dividends What are stable or irregular dividends What is high or low dividend payoutInvestor preferences and theories of dividend policyDividends are paid to the shareholders in order to keep them attached and interested in the company....
6 Pages
(1500 words)
Coursework
Management Researchers and practitioners are unanimous in their view that the underlying factor of the Company's functioning is to build and increase shareholders' value and is the main cause for its existence, besides brand building and customer satiation.
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One of the best ways to enhance shareholders' value is to build a consistent dividend policy over the years that could create value addition to the Company and ensure shareholder loyalties by consolidating and building up its position in the turbulent high waters of competitive business operations
Dividends could be said to be the reward for the shareholders' participation in contributions towards the corpus of company and its management....
13 Pages
(3250 words)
Essay
hellip; The theory of clientele preferences implies that investors do in fact have preferences between dividends and capital gains.... That is why companies adjust their dividend policies to have the appeal for a certain group of possible shareholders: “the dividend policies adopted by the firms would match the dividend preferences of investor groups”....
9 Pages
(2250 words)
Case Study
This literature review discusses dividend policy and the capital market structure of the firm.... The literature review analyses that the basis of the dividend policy itself is determined by the manager's ability to manipulate the capital structure of the firm.... The dividend policy of the firm is determined by the fact that the manager's depression to influence the capital structure of the firm by leveraging would allow him to independently act....
10 Pages
(2500 words)
Literature review
dividend policy and Capital Structure Decisions in Relation to Signaling Theory Signaling is the model that involves one party (the agent) conveying some important information with regard to himself/herself to another party, (the principal).... This may be simply represented as follows:Issue stock=bad news (overvaluation)Issue debt=good news (undervalued)The signaling view in relation to dividend policy argues that changes in dividend amounts are signals of paramount importance to the investors about management's changes expectation of future earnings (Duke,edu para 1)....
2 Pages
(500 words)
Essay