a. Critically examine dividend irrelevance theory of Modigliani and Miller and Bird in Hand Theory of Gordon and Linter b. Most prevalent types of dividend policy are
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![Question 5 [ Dividend Policies]
a. Critically examine dividend irrelevance theory of Modigliani and Miller and Bird in Hand Theory of Gordon and Linter.
b. Most prevalent types of dividend policy are –
i. Regular dividend policy
ii. Stable Dividend Policy
ii. Irregular Dividend Policy
iv. No Dividend Policy
Briefly explain each of the above policies. Link Modigliani and Miller dividend theory and Bird in Hand theory of dividend to any of the
above policies to which those theories can be linked most appropriately.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F39f60986-4bde-4b8a-8662-ba97d9dc4cff%2Fe792798b-27e0-414c-a352-a9d56f80d5d5%2Fk19jfpe_processed.jpeg&w=3840&q=75)
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- A5 9b 9. Dividend policy b. Define the clientele effect of dividend policy, and discuss whether or not it conveys information about a firm’s market value.10, b=Briefly discuss clientele theory and signaling theory of dividend policy3) Which three of the following factors are most likely to lead to a stable dividend policy? A) Clientele preferencesB) Dividends as a residual; the availability of positive NPV projectsC) Mechanisms highlighted by agency theoryD) Signalling
- Question 5 The issue as to whether dividend policy has an effect on share prices raises a question as to whether dividends paid out to stockholders are any more “certain” than the expected future dividends the stockholders hope to receive from retention of firm earnings. This is known as the bird-in-the-hand theory of dividend policy. Do you agree with this theory? Explain.A5 9a 9. Dividend policy a. Define the information content effect of a dividend, and discuss whether or not it conveys information about a firm’s dividend policy.Q19. Which of the following is NOT a characteristic of preference share? Group of answer choices 1. Pays fixed dividends. 2. Do not usually have voting rights. 3. Ranks last for payment in the event of firm liquidation. 4. Dividends can be accrued.
- Ch. 13. True/False. The Dividend Discount Model can be applied to firms that do not pay dividends. Group of answer choices True FalseDiscuss the various arguments put forward by different schools of thoughts about dividend policy ie dividend irrelevance, dividend relevance, mid-roaders schools as well as the role of market imperfections in debatec) Provide a recommendation to the management of ABC as to whether they should increase/cut back on dividends in the future. Can the dividend policy of ABC (in part b)) be improved on? Motivate your answer.
- 41) Balancing the advantages and disadvantages of using debt and equity when determining a firm’s optimal capital structure is referred to as: Question 41 options: Tax theory Trade off theory Signaling theory Pecking order theory11 The issue of dividend policy and its impact on firm value has led to the publication of various theories. Provide a review of these theories.which one is correct answer please confirm? QUESTION 19 Several regulations limit dividend payments. Which of the following do not limit dividend payments? a. Liability restriction b. Capital impairment restriction c. Restrictive covenants d. Net earnings restriction