Dividend policy, Financial Management

DIVIDEND POLICY

Dividends provide the portion of a firm's net earnings which are paid out to the shareholders.

the objective of financial management of maximizing the shareholders' wealth, the firm would be well advised to use the gross profits for paying dividends to shareholders, if it will direct to the maximization of the wealth of the owners. If not, the firm should rather retain them to finance investment programs.

But, there are conflicting believes regarding the impact of dividends on the valuation of the firm. As per the one school of thought, dividends are inappropriate so that the amount of dividends paid has no effect on the valuation of a firm. Alternatively, certain theories believe the dividend decision as relevant to the value of the firm measured in terms of the market price of the shares.

Posted Date: 10/16/2012 1:18:21 AM | Location : United States







Related Discussions:- Dividend policy, Assignment Help, Ask Question on Dividend policy, Get Answer, Expert's Help, Dividend policy Discussions

Write discussion on Dividend policy
Your posts are moderated
Related Questions
Sapp Trucking's balance sheet illustrates a total of noncallable $45 million long-term debt with a coupon rate of 7.00% and a yield to maturity of 6.00%.  This debt presently has a

At current interest rates and exchange rates, the US might have a $400 billion net financial (capital) account inflow from the rest of the world during 2010, and the

What does it mean when the U.S. dollar weakens in the foreign exchange market? While the U.S. dollar weakens in the foreign exchange market one U.S. dollar buys smaller amount un

Explain about the Internal controls of benchmarking   "Comprises control environment and control procedures. It includes all the procedures (internal contr

Determine the concept of Measuring the Rate of Return The rate of return is total return the investor receives during holding period (the period when security is owned or held

Define the safety and soundness implications of mergers? A: No. All mergers need regulatory approval and are subject to intense examination through regulators. If anything, the r

Geographical Classification of Mutual Funds : Nations' boundaries provide territorial restrictions on the sale and purchase of mutual fund units or shares as is the case in com

1. Consider the following cash flows and reversion: There is an $80,000 cash outflow at time zero. BTCFs for years 1-4, respectively, are $10,000, $20,000, $20,000, and $25,000.

Q. What do you mean by Treasury Bills? Treasury bills (TBs) are short-term government securities. The usual practice in India is to sell treasury bills at a discount and redeem

Duration and Convexity of MBS A graph decpicting the price of the security under study and the interest rates helps in assessing the duratio