...Модели дивидендной политики: развитые и развивающиеся рынки. Многие компании во всем мире выплачивают дивиденды. Несмотря на статистику уменьшения общего числа компаний совокупная сумма дивидендов продолжает расти. Поэтому неудивительно, что данной теме посвящены множество работ. Перейдем к рассмотрению моделей дивидендной политики. Наиболее значимыми теориями, получившими наибольшее распространение, являются: * Теория нерелевантности дивидендов (Ф. Модильяни и М. Миллер) * Теория предпочтения дивидендных выплат (У. Гордон, Дж. Линтнер и др.) * Теория налоговых асимметрий (Р. Литценбергер и К. Рамасвами) * Теория клиентуры * Сигнальная теория * Теория удовлетворения предпочтений инвесторов Приведем краткое описание данных моделей. Модильяни и Миллер исследовали взаимосвязь дивидендной политики и стоимости компании в идеальных условиях, предполагающих: совершенство рынков (отсутствие налогов, расходов на привлечение капитала и транзакционных затрат; равнодоступность информации для всех участников и т. д.); безразличность выбора между дивидендами или доходом прироста капитала; независимость инвестиционной политики организации от финансовой и др. Авторы теории полагали, что инвесторов в условиях совершенного рынка будет интересовать только общая доходность, а не ее конкретные формы. Таким образом, любая дивидендная политика будет приводить к одинаковым результатам не влияя на стоимость компании и благосостояние ее собственников. Теория предпочтения...
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...SCHOOL OF MANAGEMENT MASTER IN BUSINESS ADMINISTRATION (MBA) SUBMITTED BY; ROHAN DEEPAK NIKAM ROLL NO. 013096 MBA FINANCE 2 2013-2015 SUBJECT: CORPORATE FINANCE AVAILABILITY OF DIVIDEND POLICY IN CORPORATE SUBMITTED TO: PROF. NEETU SHARMA MBA FINANCE-II MEANING OF DIVIDEND POLICY A dividend refers to that portion of a firm's net earnings which are paid to shareholders. Dividends are paid either in cash or stock. Since dividends are distributed out of the profits, the alternative to the payment of dividends is the retention of earnings. The retained earnings constitute an important source of financing the investment requirements of the firm. There is inverse relationship between retained earnings and cash dividends. More dividends result in smaller retentions where as lesser dividend results in larger retentions. Thus, dividends and retained earnings are competitive and conflicting. Dividend decisions refer to the decisions regarding the division of net earnings to the dividend and retained earnings. A firm can distribute all of its earnings to the shareholders as dividends or can retain all of its earnings for reinvestment as retained earnings or can distribute a part of earnings as dividend and retain the balance for re-investment purpose. Dividend decision is a major financial decision in the sense that a firm has to choose between distributing profits to the shareholders and ploughing back them into the business. The selection would be influenced by the effect...
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...Theories for Dividend Policy and Factors Affecting Dividend Payout A Review of the Literature Prepared for, 11038 Corporate Finance 307 School of Economics and Finance Curtin Business School Curtin University Miri Sarawak Campus Abstract The main objective of this literature review is to highlight the major theories for dividend policy that have been discussed and argued by many researchers over the years. It is aim to helping firms’ management to set their dividend policy and provide additional knowledge to investors. The theoretical aspect is agency theory which has negative relationship between percentages of insiders and ratio of dividend payout. The signaling theory is applicable in the real world but there is no evidence to support changes in dividend payout signaling the current and future performance of the firm. Bird-in-the-hand theory which risk adverse investors prefer receive dividend now instead of sell their shares in future for capital gain and this theory was not agreed by MM. Next is tax preference theory to study whether the level of firm leverage ratio will affect the dividend payout but it is not applicable for Indian firms. Lastly will discuss about how firm size and financial leverage can affect the firms’ dividend payout. In conclusion, since firms are free to choose whether to distribute dividend or retained their earnings, so there are not right or wrong theories and factors for dividend policy. Government regulations on firms and corporate...
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...The term ‘dividend policy’ refers to “the practice that management follows in making dividend payout decisions or, in other words, the size and pattern of cash distributions over time to shareholders” (Lease et al., 2000, p.29). This issue of dividend policy is one that has engaged managers since the birth of the modern commercial corporation. Surprisingly then dividend policy remains one of the most contested issues in finance. 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 company's long-term earning power. When cash surplus exists and is not needed by the firm, then management is expected to Payout some or all of those surplus earnings in the form of cash dividends or to repurchase the company's stock through a share buyback program. Management must also choose 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. Our group have selected 3 journals related to the dividend policy in...
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...Dividend Policy at Linear Technology from StudyMode Of the 16 companies on the SOX index, six paid dividends and Linear Technology is one of them started at the second quarter in 1993 which is 5.3 million in total. However, in the case, according to Coghlan, “The quarterly dividend was initially set at $0.05 per share. This amounted to $8.3 million, or 15% of FY 1994 earnings.” And their most recent dividend in 2002(cause in the exhibit2, there’s only threes quarter’s data in 2003, so that’s why I choose 2002 as the last year), the dividend was $0.17 per share amounted to 54 million total. Through out the decade, the company’s dividend generally increased and so did share repurchase except 1997 and 2000 which is 11.6 and 0. Their cash flow almost connected positively with their dividend except year 1999 and 2002. Because during these two years, company spent large amount of money repurchase their stock and left few cash. Linear bought back their stock when they believed the price of the stock was undervalued. One thing for sure for the Linear, they got excess cash. Based on the balance sheet of 2003, positive cash flow could faster the development of the company but they also need to suffer the extra tax. For example, in 2003, the company got 1565.2 million of cash sitting on the balance sheet. And today, Chase provides the one year regular saving rate with 0.01%. Thus, the extra tax would be: 15652000000*0.01%*38.6%=60,416.72. And also, the company failed to involve the benefits...
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...debate on how dividend policy affects a firm’s value. Researchers such as Gordon (1959) believed that dividends increase shareholders wealth, Miller and Scholes (1978) considered dividends to be irrelevant and others such as Litzenberger and Ramaswamy (1979) thought that dividends decrease shareholders wealth. As a result, a number of studies have been undertaken to solve the “dividend puzzle”, a concept which tries to answer the question of whether paying dividends actually makes a difference or not. Many economists argue that dividends should not have any effect on the investor’s valuation of the company because the investor is an owner of the firm and should be indifferent to either getting the dividends or having them reinvested in the firm. The above conclusion, nevertheless, has proven futile as, in the majority of the cases; investors do demand some type of a dividend payment (Cohen, 2002). As a result, it’s important for firms to have a dividend policy in order which will help them make decisions regarding paying cash dividend in the present or paying an increased dividend at a later stage. The Determinants of Dividend Policy An optimum dividend policy is one that strikes a balance between current dividends and future growth and should be based on two basic objectives – maximizing the wealth of the firm’s owners and providing sufficient funds to finance growth. The determinants of a firm’s dividend policy are discussed below. The prevailing dividend and corporate...
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...Chapter 13 Dividend Policy Solutions to Problems P13-1. LG 1: Dividend Payment Procedures Basic (a) Retained earnings (Dr.) Dividends payable (Cr.) (b) Ex dividend date is Thursday, July 6. (c) Cash $170,000 Dividends payable Retained earnings $0 $2,170,000 Debit $330,000 $330,000 Credit (d) The dividend payment will result in a decrease in total assets equal to the amount of the payment. (e) Notwithstanding general market fluctuations, the stock price would be expected to drop by the amount of the declared dividend on the ex dividend date. P13-2. LG 1: Dividend Payment Intermediate (a) (b) (c) (d) Friday, May 7 Monday, May 10 The price of the stock should drop by the amount of the dividend ($0.80). She would be better off buying the stock at $35 and taking the dividend. Her $0.80 dividend would be taxed as the maximum rate of 15 percent and her $4 short-term capital gain would be taxed at you ordinary marginal tax rate, which is probably higher than the 15 percent. If she bought the stock post dividend for $34.20 she would pay her marginal ordinary tax rate on the full $4.80 of short-term capital gains. P13-3. LG 2: Residual Dividend Policy Intermediate (a) Residual dividend policy means that the firm will consider its investment opportunities first. If after meeting these requirements there are funds left, the firm will pay the residual out in the form of dividends. Thus, if the firm has excellent investment opportunities, the dividend will be smaller than if investment...
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...Introduction 2 2.0 Dividend Irrelevant Theory 2 3.0 Company Listed at Bursa Malaysia 3 3.1 Zelan Berhad 3 3.2 FACB Industries Incorporated Berhad 4 3.3 Carlsberg Brewery Malaysia Berhad 5 3.4 Axiata Group Berhad 6 4.0 Others Factors Affect Dividend Policy 7 5.0 Impact of Tax on Dividend Policy 8 6.0 Conclusion 8 7.0 References 9 8.0 Appendix 10 1.0 Introduction Company may return to their shareholder by paying dividend or repurchasing back the shares. A company may pay a generous dividend and knowing that it will have to schedule new stock issue to raise cash for investment. Otherwise, it will pay no dividend instead use cash to repurchase shares. (McGraw Hill Irwin, 2010) In the aspect of investor, changes in dividend convey information about company's profitability. As a investor, he/she may be worried about that cash-cow (free cash flow) company will run out of positive-NPV investments and waste cash on perks or poor projects so dividend payouts are one of the way to relieve such worries. (McGraw Hill Irwin, 2010) When a company decides to declare divided, if necessary, it would choose to raise new funds to maintain the payout. Therefore it will relate to Irrelevant Dividend Policy. Besides that, to avoid the risk of a reduction in payout as a financial manager may smooth dividend, therefore the transitory earnings changes are unlikely to affect the dividend payout. It is because, if a company pay a high dividend without the cash flow...
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...Berman; Tom King, Progressive Insurance; Rick Passov, Pfizer; Erik Sirri, Babson College; and Joe Willett, (formerly) Merrill Lynch. Moderated by Don Chew. Where M&A Pays and Where It Strays: A Survey of the Research Robert Bruner, University of Virginia Pathways to Success in M&A Mahmoud Mamdani and David Noah, Morgan Stanley In Defense of Incentive Compensation: Its Effect on Corporate Acquisition Policy Sudip Datta and Mai Iskandar-Datta, Wayne State Reappearing Dividends Brandon Julio and David Ikenberry, University of Illinois Making Capitalism Work for Everyone Raghuram Rajan and Luigi Zingales, University of Chicago University, and Kartik Raman, Bentley College Reappearing Dividends by Brandon Julio and David L. Ikenberry, University of Illinois at Urbana-Champaign * I n his 1976 classic called “The Dividend Puzzle,” Fischer Black wrote that there was no convincing explanation for public corporations’ centuriesold practice of paying cash dividends to their shareholders. His argument rested on two main premises. The first was Modigliani and Miller’s demonstration that,...
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...“The dividend decision is unimportant to the wellbeing of a company.” Discuss Stock is a product of socialization production, and the earliest stock can be tracked back to 17th century. In terms of stock, dividend decision is an important concept, which can not be ignored. Dividend decision is defined as ‘Determines the division of earnings between payments to shareholders and retained earnings.’ ( http://finance.mapsofworld.com/corporate-finance/investment-decision/dividend.html ) Dividend decision is also called dividend policy, which has always been disputed. However, no matter how it is debated, dividend policy is very important to the healthy and orderly operation of a company. In the fist place,this essay will discuss the effect of different dividend policies on companies running, secondly indicate dividend decision should be changed to be fit for different growth periods and various investment opportunities, thirdly investigate how the refunding ability and cost of a company are affected by dividend policies, after that this paper will talks about the relationship between dividend decision and the structures of control rights to an enterprise, finally this article will evaluate the M&M theory and further prove that the importance of dividend policies for a corporation. There are diverse types of dividend policy, and each policy has different influence on corporations. Generally,Constant Payout Ratio (CPR), Constant Dollar Dividend Policy(CD), and Regular with Extras...
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...Contents 1. Introduction 2 2. Dividend payout theories 2 3. Change in dividends only because of necessarily 3 4. Clientele Dividend of Shareholders 6 5. The Taxes Liability as an Effect on Dividend Policy 7 6. Conclusion 7 References 8 1. Introduction Dividend indicates a share profit delivered to shareholders regarding to certain payout ratio. An efficient firm normally saves their finance to wait opportunities from acquisitions which affects earnings realistically. Afterward, the firms can make decision on whether to buy back their shares with their dividend income or to adopt to apply on other activities. However, the decision is depended on many internal and external factors which need to be considered carefully. 2. Dividend payout theories Up to date, dividend policy is a controversial debate in following components: - Level of dividend payment. - Stability of dividends. - Frequency - Dividend announcement. - Investors’ preference. There are three theories related to three theories to the debate: - Dividends are irrelevant - Bird in the hand. - Tax preference. Company managers have less interest on cutting dividends and raising dividend since a stable level of dividend payment might be preferred by investors. The reason behind is that dividend change is considered as signals of management’s view of the future. As such, a change (increase...
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...| | | Dividend Policies Cogeco Cable Inc., Shaw Communications, & Cablevision Systems Corp. | Kristina Kacanski (211565827), Wei Fu (211521242), Guillaume Lacour (213242003)FINE3100 Karen Chiykowski November 14, 2013 | Table of Contents Executive Summary 3 Industry Analysis 4 Business Strategy 5 Industry Dividend Analysis 7 Cogeco Cable Inc. Dividend History 7 Shaw Communications Dividend History 9 CableVision Systems Corp. Dividend History. 9 Dividend Policy Recommendation 10 End Notes 12 Appendices 13 Appendix A: Porter’s Five Forces Analysis 15 i. Porter's Analysis ii. Summary Appendix B: Damodaran’s Dividend Policy and Frictions/Market Imperfections 15 i. Equity Trade Off and Life Cycle of a Firm Appendix C: Revenue Streams. 16 Appendix D: Cogeco Cable Inc. Tables 17 i. Cogeco Cable Inc. - Revenue ii. Cogeco Cable Inc. - Cash iii. Cogeco Cable Inc. - Market iv. Cogeco Cable Inc. - Dividends v. Cogeco Cable Inc. - Ratios Appendix E: Shaw Communications Tables 19 i. Shaw Communications - Revenue ii. Shaw Communications - Cash iii. Shaw Communications - Market iv. Shaw Communications - Dividends v. Shaw Communications - Ratios Appendix F: Cablevision Systems Corp. Tables 22 i. CableVision Systems Corp. - Revenue ii. CableVision Systems Corp. - Cash iii. CableVision Systems Corp. - Market iv. CableVision Systems Corp. - Dividends v. CableVision Systems Corp. -...
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...Abstract: As Bangladesh is a developing country, the corporate finance is growing very slightly in our country. One of the important aspects of a corporation is its "Dividend Policy" that affects the financial structure, flow of funds, liquidity, price of stocks, and shareholder's satisfaction. This paper attempts to determine how the Beximco Pharmaceuticals Ltd (BPL) uses its dividend policy to increase the value of the firm and the impact of dividend policy on its stock price. We tried to illustrate and analyze net income, earning per share, cash dividend, stock dividend, dividend payout ratio and right share for empirical analysis of dividend distribution of Beximco Pharmaceuticals Ltd (BPL).The expectations of dividends by shareholders helps them determine the share value, therefore, dividend policy is a significant decision taken by the financial managers of any company. 1.2 Introduction: Dividend Policy is concerned with taking a decision regarding paying cash 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 investor; however, it ensures capital gains to the stockholders. The expectations of dividends by shareholders helps them determine the share value, therefore, dividend policy is a significant decision taken by the financial managers of any company. . 1.3 An Overview of Beximco Pharmaceuticals Ltd (BPL): Beximco Pharmaceuticals Ltd...
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...THE ROLE OF DIVIDEND POLICY IN STOCK PRICE DETERMINATION IN TELECOMMUNICATION INDUSTRY: THE CASE OF PLDT AND GLOBE FATIMA KAYE A. DE CHAVEZ, LORELLA A. ESPELETA and LESLIE JOY A. PATIO College of Business and Accountancy University of Batangas ABSTRACT The issue of how much a company should pay its stockholders, as dividend is one that has been of concern to managers for a long time. The optimal dividend policy of a firm may be defined as the best dividend payout ratio the firm can adopt. But, what does "best" mean in this concept? This paper is an attempt to explain the effect of Dividend Policy on the Stock Prices by taking the top two Telecommunications Company namely Philippine Long Distance Telephone Company and Globe Telecom. Other various websites were reviewed to see the significance of these dividend policies on the determination of stock prices. Charts, tables and other significant information of these two telecommunication companies which have been evaluated served as the methodology used by the researchers. The study identified that these top two telecommunication companies have different dividend policies being implemented. This difference among the two companies does not have a significant impact as long as stock price determination is concerned. The study also showed that an increase or a positive change in the company's dividend ratio gives a higher dividend among stockholders, yet several minor reductions to dividends have occurred due to capital acquisition...
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...DIVIDENDS & STOCK REPURCHASE - I Dr. Kulbir Singh ACF Term III 2013-14 IMT Nagpur • Shareholders love it. • Bondholders hate it. • Managers consider it obvious. • Financial economists find it puzzling. • What is it? • Dividends; what else?! INTRODUCTION Dividend has been defined u.s. Sec 2 (14A) of the Companies Act, 1956 Dividend payment by Indian Companies are regulated by Sec 205 of Companies Act, 1956 Dividend is distribution of divisible or distributable profits of a company among the holders of its shares. Paid by the company to its shareholders on the basis of number of shares held by them and the rights attached to the various class of shares. Dividend includes any interim dividend Dividend declared at any time between two AGM Paid in anticipation of profits of a period before accounts for that period have been prepared Can be paid if authorized by AoA Declared by Board of Directors in AGM Declaration of dividend is usually one of the items of the Agenda of every annual general meeting Approval of shareholders required in India and most of Europe and China, but not in some countries like the USA. INTRODUCTION Dividend is paid by a company to its shareholders on a particular date (book closure date) either out of profits or out of reserves. Dividends are paid after providing fro Depreciation (Sec 205(1) to the extent specified in Sec 350 of the Companies Act) and After transferring to the reserves (Sec 205(A)) of the company at least 10% of...
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